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DISPUTE
OVER TV NOVA
I. Czech TV
regulator again rules against CME.
The Czech Broadcasting Council, for the second time
in two weeks, has ruled against US-owned Central European
Media Enterprises (CME) in its battle for control of
nationwide station TV Nova, the Czech news agency CTK
reported on Tuesday. It quoted a member of the council as
saying that after further review, the Council again
agreed that the battle between TV Nova’s Czech
license holder CET-21 and CME, which operated Nova until
CET-21 cancelled its broadcasts on August 5, was a
commercial conflict not requiring the regulator’s
intervention. CET-21 halted CME’s broadcasts on
August 5 amid a legal dispute between its majority owner,
Vladimir Zelezny, and CME. The dispute has forced a
reworking of European television group SBS
Broadcasting’s planned $615 million purchase of CME.
Last week, CME halted all production of its Czech unit
CNTS and sacked most of its more than 200 staff. Numerous
lawsuits and counter measures have been filed since CME
sacked Zelezny as the chief executive of CNTS in April
claiming he made unauthorised programming deals while
managing CNTS. CET-21 maintains that it was within its
rights as license holder to cut CNTS off. CME has filed
for arbitration seeking $523 million in damages from
CET-21 in an Amsterdam tribunal. Majority owner, New York
cosmetics scion Ronald Lauder, has personally sought
arbitration against the Czech government claiming
violations of a Czech-US investment treaty signed in
1991. (Central Europe Online / Reuters, September 15,
1999)
II. CME wants to
buy Prima TV licence as compensation.
If US company CME [Central European Media
Enterprises] succeeds in purchasing [commercial] Prima
TV, the majority shareholder of CME Ronald Lauder would
withdraw his complaint against the Czech Republic for
breach of investment protection treaties to which it is a
signatory, CME president Fred Klinkhammer has told [the
Czech daily] ‘Lidove noviny’.
Prima
is one of the two commercial TV channels in the Czech
Republic. The other is Nova TV, which is the subject of
dispute between CME and its former business partner,
Czech company CET 21, which is the owner of the licence
for Nova TV. CME is the majority owner of CNTS, which
until recently was the main programme provider for CET
21. . . .
Foreign
Ministry spokesman Ales Pospisil told ‘Lidove
noviny’ that Czech Foreign Minister Jan Kavan is to
meet US Secretary of State Madeleine Albright today.
However, he added that though the dispute would be
mentioned, it was very unlikely that it would be the sole
subject of their discussion.
The
only just solution to the dispute would be for CME to
obtain the licence for Prima TV, said Klinkhammer, since
the Czech Republic is too small a country for cable or
satellite TV.
Moreover,
he told ‘Lidove noviny’, many Czech
politicians, who need to get on TV at prime time, have
told him that they fear Zelezny’s influence and
support the sale of Prima to CME. At present, says
Klinkhammer, it seems that Prima is controlled by
Zelezny. Selling it to CME would therefore, in
Klinkhammer’s opinion help create a competitive
environment in Czech TV, the current lack of which also
keeps advertising costs artificially high.
According
to Klinkhammer, CME’s dispute with CET 21 will be
very difficult to solve because no matter what the courts
decide, Zelezny ignores them. Moreover, the regulatory
body for television in the Czech Republic, the Radio and
Television Broadcasting Council, and the police are not
performing their work, says Klinkhammer. (CTK news
agency, Prague, 24 September 1999)
III. Foreign
ministers discuss dispute over TV Nova.
US Secretary of State Madeleine Albright and her
Czech counterpart Jan Kavan today discussed the dispute
over [Czech commercial] Nova Television, Kavan told CTK
and Czech Radio after the meeting. He said that Albright
praised the role of the Czech Foreign Ministry which was
collecting information about this trade dispute between
CME and the CET 21 company which holds a licence for Nova
broadcasting in the Czech Republic. “We are
interested in coming to an agreement which will mainly be
advantageous for the Czech Republic and for the feeling
of security of foreign investors, either American ones or
from the European Union,” Kavan told Albright.
CME
majority stockholder American billionaire Ronald Lauder
has filed a complaint against the Czech Republic about
the devaluation of his investment. He justified his
complaint by pointing to the violation of an agreement on
the protection of investment between the United States
and the Czech Republic.
Kavan
added that his deputy Hynek Kmonicek would be the Foreign
Ministry top representative to meet CME representatives
in New York.
Kmonicek
told CTK that a meeting would take place by Wednesday
[29th September], adding that it had been initiated by
the Czech side.
Kavan,
who leads a Czech delegation at the 54th session of the
United Nations General Assembly, said that the talks
about Nova Television only lasted several last minutes of
his meeting with Albright. He stressed that the Foreign
Ministry had not taken sides in the dispute but was only
seeking to obtain information and was analysing the
matter from the point of view of the Czech
Republic’s interests.
The
dispute between CET 21, which owns the licence for Nova
TV, and Central European Media Enterprises (CME), which
is the majority owner of CNTS, until recently the main
programme provider for CET 21, is of a business nature
and could be resolved in the courts. CNTS was the
exclusive programme provider for the most-watched Czech
TV channel, TV Nova, from Nova’s foundation in 1994
until earlier this year. On 5th August CET 21, which is
the licence holder for broadcasting TV Nova, repudiated
its contract with CNTS and started broadcasting its own
programmes along with some purchased from other service
organizations. (CTK news agency, Prague, 24 September
1999)
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