Record breaking funding from the Hungarian government: the Association for Transylvanian Media Space received 20 million EUR over a few years. However their reports are vague when it comes to audiences and circulation, the budgets include six-figure items for “other services”, while the promised innovations have never materialized.
In the past three-and-a-half years, until June 2021, the Association for Transylvanian Media Space (official name: Asociația pentru Spațiul Media Transilvan/Erdélyi Médiatér Egyesület, ATMS) received 7.45 billion HUF (about 20 million EUR) in grants from the Hungarian government. With this funding the association, unknown until recently, has become by far the largest Hungarian-language media trust in Transylvania; it would be easier to count the media channels which are not part of the holding yet.
A few comparisons are instructive to grasp the true weight of this sum. For instance the 1,2 million Hungarian minority community gets about the same amount annually from the public budget: 5-6 million EUR (this amount represents the budget of the main Hungarian political party, the DAHR).
ATMS’s financial balance shows revenues of 18.2 mil RON in 2020 (3.6 mil EUR), which puts it on a par with the large players on the Romanian media market, serving an audience 14 times bigger than the local Hungarian community.
In spite of this generous funding, however, there is no trace of the innovations and developments promised at the beginning of 2018, such as “the Transylvanian Hungarian web of the XXI century, Transylvania 3.0”. The number of employees and their salaries have not risen noticeably; in fact the latter dropped by 25% for a few months in 2020, due to the COVID crisis. The retail distribution operation of the group was closed and some local newspapers were merged into the regional daily Székelyhon.
Spectacular investments in digital were discussed for a number of years to take the Hungarian-language media in the XXI. century, but they are nowhere to be seen, if we don’t count the YouTube channel of Székelyhon.
“This difficult period has slowed down the development but we are working on it. We will continue to expand and grow, and will not give up on these plans” said ATMS’s president László Árpád Mohácsi; his full comments are at the end of this article.
Collateral victims in the Orbán-Simicska war
The story of this trust began in 2018 when Udvarhelyi Híradó SRL, a media company controlled by the Hungarian businessman Lajos Simicska, went bankrupt. Simicska had been for a long time the top oligarch of FIDESZ: former roommate of Viktor Orban and with an innate talent for deals, he was the person in charge with party finances.
But over time his influence in government grew so much that it became a challenge for Orbán. Things escalated into an open spat between the two men in 2015, after which the authorities blocked the access of Simicska’s companies to all public contracts and made him engage in forced divestments.
Udvarhelyi Híradó SRL was a victim in this conflict: Simicska did not want to finance it through the Foundation “Hungarian Media without Frontiers”, and the government too dropped the foundation from the funding list to stop the flow of money to Simicska. On top of that, there was poor management: a criminal complaint was filed against the CEO of Udvarhelyi Híradó following an independent audit.
Schemes to save the newspapers in Szeklerland
The Budapest government did not allow the company to dismantle, though, as it was managing a number of dailies (regional newspaper Krónika, and the local newspapers Vásárhelyi Hírlap, Csíki Hírlap, Gyergyói Hírlap, Udvarhelyi Híradó), a weekly (Erdélyi Napló) and one of the most popular Hungarian news portals in Transylvania (szekelyhon.ro).
Shrewd maneuvers took place at the end of 2017 and in 2018, planned by the “informal ambassador” of the media trust and the brain behind the deal: Szilárd Demeter, born in Szeklerland and former employee of a think tank close to the Hungarian government.
The first step was a financial injection of 1.45 bn HUF (4.5 mil EUR) into an obscure association, the Association for Transylvanian Media Space (ATMS), made on Dec 27th 2017. The second move took place on Jan 6th 2018: with capital at hand, ATMS bought 5% participation in a small company in Odorheiu Secuiesc, Prima Press SRL, which was managing Príma Rádió, owned by the businessman János László.
On Jan 8th Prima Press SRL hired over 160 employees of Udvarhelyi Híradó SRL, which was in bankruptcy. Finally, on Jan 12th 2018 János László sold his shares and ATMS became sole owner of the company.
Who would have thought in 2013, when ATMS was registered, that in less than five years the non-profit would become the main player on the Hungarian-language media market in Transylvania? The initial goal of the association was modest: to publish the current affairs news and commentary portal Főtér.ro, with annual revenues of about 120,000 EUR, mainly grants coming from Hungary.
“Our aim was to reflect a diversity of views, from left to right, and to encourage debate within the Hungarian community in Transylvania” said István Szakáts, a civic activist serving briefly as president of the association after it was established. He recalls that in its first application for funding Főtér.ro was described as a portal hosting balanced opinions, but soon after the right-wing views became prevalent, both online and in the association, Szakáts resigned.
The next president was László Árpád Mohácsi, photographer and graphic artist, former staff member of MEP László Tőkés, a conservative politician and rival of UDMR; about the same time Szilárd Demeter had been Tőkés’ chief of staff.
Mohácsi had no particular experience as a journalist or media manager. He can be seen in Facebook pics together with Szilárd Demeter, activists from the Hungarian Popular Party and organizers of Tusványos (the annual political summer university held in Tuşnad Băi, Harghita county, where top leaders from Hungary usually visit and give speeches).
A growing portfolio
ATMS continued with the acquisitions after 2018. In spring 2021 it bought Radio GaGa from Târgu Mureş, having among its owners the former UDMR senator György Frunda.
The main entity of the holding is Prima Press SRL, which employs most people (189) and owns most media brands. Smaller companies in ATMS’ portfolio are Agotika Invest SRL, the company behind Friss FM from Sfântu Gheorghe and Kelet Info SRL from Gheorgheni, owner of the license for Fény TV.
Other publications had been previously owned by the publishing house Varjúvár SRL, but when this went out of business the staff was moved over to ATMS. The management for the whole group is done by a company set up for this purpose, Transversum SRL, which also sells the advertising. In its turn Transversum SRL is owned just 80% by ATMS, while the rest of 20% belongs to a Hungarian company, Magyar Médiaszolgáltatást Támogató Központ Nonprofit Kft.
The 30-odd channels held in ATMS’ portfolio are listed on Transversum’s website, the centralized manager of publicity: newspapers and their web pages, radio stations, a job search portal, a women’s magazine, a cultural supplement, a local TV and even a teletext service.
Advertising: 10% of revenues
It is hard to guess how much of the total turnover of the group is independent from the Hungarian government. No data exists about print sales. The revenues from advertising of Transversum SRL were 2.2 mil RON in 2019. The following year the figure dropped to 1.6 mil, probably because of the pandemics, but this loss was partly compensated by the government anti-Covid subsidy: according to data from ExpertForum, the companies from this trust received around 250,000 RON by the end of 2020.
These revenues of 1.8-2.2 mil RON represent about 10-15% of the holding’s turnover. This is important to notice because, when the whole arrangement was created, the promise was to gradually reduce the operating costs of the companies and make the holding commercially viable in the medium term. There is no sign of such development as yet.
Initially the association bought media channels close to the opposition to UDMR, but later the direction changed. Today the portfolio includes most of the local mass media not directly owned by UDMR.
Opinions critical with the Hungarian government cannot be published
While the Hungarian-language media space is apparently diverse, in fact the Hungarian public in Transylvania does not have much choice: they can opt for the ATMS channels mentioned above; or the ones financed by UDMR such as Erdélyi Magyar Televízió (Hungarian Transylvanian TV) and Erdély FM, managed by the Jenő Janovics Foundation, and maszol.ro, published by Progress Foundation. There are also news programs in Hungarian language on the Romanian state TV and radio, where the staff there should be recruited solely on merit, but in reality the managers are appointed politically by UDMR.
Many people feared that so much money from Budapest would create a wave of centralized pro-Orban propaganda in Transylvania, as it happens in Hungary, but this is not the case.
Informal talks with insiders confirm that the marching orders refer not so much to what can be said – but to what cannot be said. No critical voice to the Hungarian government must be heard.
There were some articles critical of UDMR in the previous years, but even these have vanished lately, especially during the electoral campaigns. This is a clear indication of the good relationship between FIDESZ and UDMR these days – and a sign that ATMS’s acquisitions are also an effective instrument to discipline UDMR.
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“This holding was created with a clear purpose: to hold UDMR in check” said one of our sources, who added that the Romanian ethnic party would have a big problem if the whole media trust would turn hostile during the electoral campaign.
Another source, a politician from the opposition to UDMR, explained the logic behind the acquisitions: “it is better that we buy them all, rather than someone else”. (Our article about how the relation FIDESZ-UDMR has evolved over time, here).
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It is not clear how many readers and followers these publications have
Little is known about the idea to transform and modernize the media space in Transylvania, apart from the hint dropped by Szilárd Demeter in the interview where he promised “a Transylvanian Hungarian web of the XXI century, Transylvania 3.0”.
The first financing agreement of 1.45 bn HUF with the Ministry of Human Resources was quite unspecific. More recently the Bethlen Gábor Fund, which manages the grants, responded to our requestst for information and provided ATMS’ applications for funding and reports.
Even with these documents in hand it is still not easy to guess the number of users of the media channels in its portfolio: the annexes do not include verifiable data about the traffic and audiences.
What is more, some data are contradictory. For instance, the financing request of January 2019 says that “the public of the newspapers, portals and radio stations is over 300,000”; the one of June 2019 mentions that the online platforms of the printed newspapers have “hundreds of thousands of visitors”.
One year later, in April 2020, the same request reported that “70 communication channels (portals, Facebook etc) are connected with the media products of the group”, with a total monthly reach of 900,000 Hungarians from Transylvania. Later in the same document the number given is 400,000 people.
Going up or down?
A careful reading of the application increases the confusion: “Thanks to our diligent and well-organized activity, we managed to increase our readership despite the general downward trend of the market”. But a few pages on “securing the level of readership remains a further objective” and “even keeping the level of readership is a challenge, under the changing circumstances”.
The Bethlen Gábor Fund (BGA) grants subsidies of about 2 billion HUF per year based on applications which have just a few pages and not many details. It is not clear how audiences were measured for the online, print, radio stations, or teletext.
It is also a mystery how they managed to increase the numbers in just a little more than one year, from January 2019 until April 2020, and at the same time warn that securing the existing levels of audience is a challenge. Data is anyway hard to confirm as official figures on readership and listeners of radio stations do not exist.
A lot of money for a modest traffic
It is easier with the online platforms. According to data published by Székelyhon, the biggest portal of the media group, the number of users of the online platforms of the group (by Google Analytics standards) was around 600-900,000 per month in 2020. This corresponds with the one indicated in the financing application. BRAT, the independent media circulation auditor in Romania, offers different numbers, but the methodology may differ too.
In 2020 the online platforms of the group had 7.7 million visitors. It may seem a lot, but a closer look puts things in the right perspective: maszol.ro, the other large player on the online Hungarian media market in Transylvania, had 6.6 million users last year. This is managed by the Progress Foundation, established by UDMR, and in 2020 its budget was 240,000 EUR, i.e. just a fraction of the budget of the newspapers group Székelyhon.
The print press will continue for just a few years
The project attached to one of the funds requests indicates that a significant proportion of the printed media’s public cancelled their subscriptions in 2020. As a result, the association will reinforce its online presence in the future.
“The printed media was severely impacted by the pandemics… We had to face the situation in which paper is perceived as an infection vector by the users-subscribers (…) A significant number of them gave it up for this reason (…) The next professional challenge for us is to make consumers of traditional media embrace the new technologies, so that we can reach them via online and mobile applications”.
The plan goes on to describe a bleak picture for the future of the group’s print operation:
“In the so-called transition period we will have to preserve the traditional channels (print). It is not advisable to stop printing overnight… The key question for the next period is how to transform the current printing content so that it preserves its function to shape and protect the identity of the community, irrespective of platform”.
“For the next 3-5 years we can still count on the mediating role of the print press, and the transition to alternative channels must be carefully planned. The long- and medium-term task is to consolidate the news portals belonging to the association (Székelyhon, Krónika, Liget, Nőileg etc.) and expand the access to them (mobile applications, social media).
A pillar of our survival
Árpád Mohácsi, the author of this concept, thinks that “the continuation and functionality of the media group is a vital issue”, while “the challenges are high because of the media market in recession and the nationalism prevalent in the Romanian politics”. As a result “the media group is one of the pillars not only of the Hungarian-language news environment, but of the very survival of the Hungarian community in Transylvania”.
What is the money spent on? According to the budgets attached to the applications, ATMS uses a small portion of them for its own operational costs; the largest part goes to the companies and publications it owns, and into salaries. These costs amount to about 600-800 million HUF per year (1.7-2.2 million EUR). It does not follow clearly what other costs will be covered from the annual subsidy of 1.8 billion HUF (5 million EUR), increased to 2.2 billion HUF (6.1 million EUR) in the first half of 2021, apart from the salaries of the 220-250 employees (the group had 242 employees in 2020 according to official data) and the overheads.
1 million euro for buying additional media channels
Even this sketchy data available raises a few red flags: for example, in the 2019-2020 budget 58 million HUF (160,000 EUR) were allocated for “creating an IT program”; the following year another 40 million HUF (110,000 EUR) went for the same item.
270,000 EUR for software development looks suspect because many off-the-shelf applications exist, either free or very cheap to use, for editing and content organization, or business management. And looking at the media products, they don’t seem to require special software anyway.
While it is hard to imagine a more effective media portfolio for advertising purposes, still 30 million HUF (83.000 EUR) were budgeted in 2020-21 for advertising.
Another suspicious budget line for this period is the 350 million HUF (1 million EUR) for buying additional media channels. This raises eyebrows because, to our best knowledge, there is no media operation valued at 1 million euro which is not in ATMS’s portfolio already.
“Other services”: the key to the mystery?
The oddest thing is the “other services”: they amount to 285 million HUF (790.000 EUR) in the 2019-2020 budget and 200 million HUF (550,000 EUR) in the previous budget.
It is unlikely that they include specific direct costs for the media operations, like printing, consumables, protocol or per diems, because these are listed elsewhere.
“The investments and development costs are confidential information, we cannot disclose business secrets” said László Árpád Mohácsi when asked to comment on these budget lines.
According to ATMS’s president they permanently reinforce their community, work tirelessly to build the most modern cultural media business in Transylvania and permanently search for grants. “All along we are accountable to the donor for every penny spent, according to all relevant legislation, and pay taxes on time” he added.
„We expand and grow”
“The conditions on the media market are far from ideal. The change in consumer habits over the last years and the Covid crisis have an impact on everything, including in this sector. However in spite of everything we have obtained results of which we are rightfully proud.
We permanently expand, put out more content and of increased diversity from our own sources, on an increasing number of channels. The number of users is going up thanks to our diligent and solid work. Not only that we didn’t close our distribution retail operation, but we are expanding it to unprecedented levels.
During the pandemics we tried to save the jobs of all our colleagues from the group’s companies, to preserve them at all cost, because we knew that those who are laid off would face great difficulties in finding another job. This period has slowed down the development, but we work hard to restart the process. We continue to develop, expand and grow, we have not given up on these things”, says Mohácsi.
Photo on first page: Szilárd Demeter (left) and the president of the Association for Transylvanian Media Space, Árpád László Mohácsi. Source: Facebook
This report has been prepared with support from IRI’s Beacon Project. The opinions expressed are solely those of the author and do not reflect those of IRI.