and its chief executive Vladimir Zelezny in the Czech Republic
NOVA TV is owned by CME, registered in Bermuda, Holland and the Netherlands Antilles. CME is quoted on NASDAQ in the United States. The CME stock market prospectus, distributed to its NASDAQ shareholders, says that NOVA TV must observe the principles of journalistic impartiality and public morals. As can be seen from what follows, this is not the case. Furthermore, Mr Vladimir Zelezny's public statements, made in the Czech Republic, directly contradict many statements, included in the official reports, lodged by CME with the US Security and Exchange Commission.
On Wednesday 29th January 1997, the Czech Council for Radio and TV broadcasting issued a warning to the CET 21 group, the holder of the broadcasting licence for NOVA TV, which is owned by Ronald Lauder's Central European Media Enterprises. The Council said that NOVA TV has been infringing the Czech Broadcasting Act, which requires broadcasters to provide a balanced and objective news and currrent affairs coverage. The Council added that if NOVA TV does not stop infringing the law, the broadcasting licence might be taken away from CET 21.
NOVA TV is operated in the Czech Republic by CME, which owns 88 percent of shares in NOVA TV. With the help of NOVA TV's chief executive Vladimir Zelezny, CME has now started the process of gaining a majority in CET 21, in order to fully control the broadcasting licence. A loan agreement was signed in July 1996 between Zelezny and CME, for 4,7 million dollars to enable Zelezny to purchase 43,31 per cent of CET 21 shares and 5,2 per cent NOVA TV shares (held until now by CET 21) for CME.
FIRST PUBLISHED IN CZECH in the NEVIDITELNY PES Internet daily on 30th January, 1997 (see: http://pes.eunet.cz), where you can find other materials on this matter in Czech.
Stepanek: We invited NOVA TV Chief executive Vladimir Zelezny, a CME representative and Professor Alan from CET 21 for a meeting on Wednesday, 29th January. In a nutshell: The Council for Radio and TV broadcasting was told that no changes in the CET 21 ownership were taking place and that the loan agreement between Mr. Zelezny and CME was Mr. Zelezny' s private matter. In Zelezny's views, there have been no changes in share ownership in CET 21. The Council has no right to interfere in the fact that CME is putting money into CET 21, he says.
(Translator' s Note: Mr. Zelezny' s statement is incorrect. According to the loan agreement, available from the US SEC on the Internet, CME is purchasing shares from the original CET 21 owners via Mr. Zelezny for 4,7 million dollars.)
Question: Are you talking about CET 21 Ltd. or CET 21 plc?
Stepanek: Vladimir Zelezny said that CET 21 plc (which was founded in 1996 for unclear reasons and is not the holder of the broadcasting licence) was not a media company, and so the Council had no right to oversee its activities. Zelezny emphasised that his loan agreement with CME only deals with CET 21 plc. (This is incorrect, see the loan agreement available from the US Security and Exchange Commission, in the CME quarterly report for the third quarter of 1996, Translator' s Note.) Zelezny also said that the loan agreement "will not be consummated". In the end Zelezny implied that Petr Stepanek' s criticism of his activities is a threat to Czech post 1989 democracy. He said that CME is thinking of leaving CET 21 Ltd., where it currently holds 1,25 per cent shares. (Translator' s Note: It is highly unlikely CME would give up its shares in NOVA TV which is its only profitable enterprise.)
Question: Why did the Council threaten NOVA TV to withdraw its broadcasting licence?
Stepanek: The Council screened Mr. Zelezny's programme "Ask the director" of 25th January, 1997, in which Mr. Zelezny addresses the nation. All members of the Council agreed that it was out of the question that any one should have the right to attack any person in the Czech Republic in this gross way. Personally I gained the impression that Zelezny is very worried that the whole matter has become public.
On Wednesday evening I asked myself whether I lived in the Czech Republic or on the Planet NOVA. Czech public service TV objectively and impartially reported the fact that the Council has issued a warning. On the other hand, the trailer for NOVA TV' s main news said: "THE COUNCIL HAS NOT TAKEN OUR LICENCE AWAY". That' s how they reported the fact that we warned them we might take away their licence.
Question: On Thursday 30th January, the whole matter was discussed by the Media Committe of the Czech Parliament, was it not?
Stepanek: Vladimir Zelezny said in front of the committe that every criticism of NOVA TV threatens its business interests and that he has the duty firmly to defend the station in public. I said that CET 21 has not been given the broadcasting licence so that it could slander any Czech citizen it chooses, without him being able to defend himself in public. This is simply immoral. NOVA TV is a medium which is setting down the broadcasting precedents in this country for future years. At the moment, it is setting down very bad precedents.
Pravo, 31st January, 1997
Chief executive of NOVA TV Vladimir Zelezny said on Thursday during the talks with the Council for Radio and TV Broadcasting that the US government might lodge a diplomatic protest against the attacks levelled at his TV station. The US investors have been angered by the attacks against NOVA TV, said Zelezny. The investors are fully entitled to use diplomatic channels to express their views, he added.
Zelezny also said that the criticism, levelled at NOVA TV by deputy head of the Council for Radio and TV broadcasting Petr Stepanek, was tantamount to "attacking the economic foundations of the Czech Republic, undermining the protection of foreign investment which the Czech Republic is dutibound to safeguard under international treaties."
Stepanek protested against Zelezny, who last Saturday called him on air "a silly clown who thinks that he can damage the work of 400 people". Zelezny now says that when he used the expression "a silly clown", he did not mean any concrete individual.
(CME, which owns NOVA TV, is not an American corporation. It is registered in Bermuda, in the Netherlands Antilles and in Holland. Translator' s Note.)
Petr Stepanek, Lidove noviny, Prague 30th January 1997
CET 21 group is the holder of a broadcasting licence for NOVA TV. But CET 21 is only an empty shell. Almost all activities take place in CNTS NOVA TV. CME now owns 88 per cent of NOVA TV. The remaining 12 per cent is held by the licence holder, CET 21. It follows from a recently concluded loan agreement between Zelezny and CME that CME now wishes to gain control of CET 21 as well. Zelezny is supposed to buy out the current shareholders in CET 21 and gain a 60 per cent majority in CET 21. At the same time, he has pledged himself in the contract with CME that he would vote these new shares as directed by CME.
This is against Czech law. Czech law says that the broadcasting licence is non-transferable.
CME will have 93 per cent control of NOVA TV. It is unprecedented in Europe that a foreign company should have such a large share in a terrestrial TV station in another country. When I said this in public, last week, I was attacked by some journalists as a "Marxist". But in Western Europe, the permitted limit of foreign TV ownership is about 25 per cent. In Poland, it is 33 per cent. In the United States, only an American citizen can be granted a TV broadcasting licence.
Imagine if in the United States a single commercial TV station controlled 70 percent of the audience, was 93 per cent foreign owned, say by a German or a Japanese company, registered in Bermuda, and its chief executive would regularly abuse on air representative of rival TV stations, such as CNN, ABC or American public service TV and members of the Congressional Committe for the Media. Do you think that the American Congress would like this?
It looks as though Marxists have gained control all over Europe and in the United States.
The Council for Radio and TV Broadcasting is fully justified when it is warning against the foreign owner who is now trying to gain a full control of NOVA TV.
There are only very few TV frequencies in this country. In fact, there is only one nationwide commercial TV frequency.
There were two possible solutions. The Czech state could have sold the frequency to the highest bidder and could have given up any control over the station' s programme content.
Or the state could have issued the licence for free, on condition that certain quality requirements would be obeyed.
The second method was used. Yet NOVA TV now observes no quality requirements and broadcasts tabloid tripe, earning tens of millions of dollars. The Czech holders of the CET 21 licence are now wishing to sell the licence they obtained for free to a foreign owner.
Some members of the Czech parliamentary Commission for the Media, for instance its Head Jan Kasal, regard this development as normal.
Yet we have all lost large amounts of money as a result of this mistake.