• On Monday Origo.hu’s editor-in-chief, Gergő Sáling was unexpectedly dismissed.
  • As a consequence many employees of Hungary’s leading news website, practically all at the politics desk, quit.
  • Both German economic interests and Hungarian politics have been deeply involved in the succession of events.
  • The fate of Origo.hu as an independent news website had been sealed  before the new editor-in-chief was appointed in November 2013.
  • You can read the original Hunagrian article here.

“This woman was sent here to fix up all conflicts with Orbán* and Co. and to safeguard the T-Group’s revenues and leading position in Hungary. This is what’s happening now.”

This is what our source, a party to several large-scale telecommunication deals says about the role of Ms. Kerstin Günther who last April was elected chairwoman of the Board of Magyar Telekom (MT). Ms. Günther, a German, played a crucial role in the process that led to editor-in-chief Mr. Gergő Sáling ending up in the buffer zone between German economic and Hungarian political interests, and finally geting dismissed.

The Undersecretary is sad

Recently both Origo.hu and Mr. Sáling have clashed with Fidesz** several times, partly because of one of the party’s most influent politicians and Undersecretary to the Prime Minister, Mr. János Lázár.

Although in the Hungarian media market Origo.hu has taken independence to the utmost, the government considered the website opposition leaning. During the editorship of Mr. Albert Gazda who left the website last year after 18 months at the helm, the government had complained that Origo.hu was biased. Then this year came a series of stories that the governing party felt sore about.

One was how the affair of Mr. Antal Rogán’s flat*** was treated; the other Origo’s boycott of Fidesz’s election victory celebration in April, after the accreditation to the event of several media (e.g. 444.hu) had been withdrawn. The latest conflict was a Freedom of Information lawsuit against the Prime Minister’s Office led by Mr. Lázár and the exposure of Mr. Lázár’s trips abroad where he spent a couple millions of forints****.

Since Tuesday evening Mr. Lázár has claimed on two occasions that he has never exerted pressure on any journalist, and that he does not even know the dismissed Mr. Sáling. He would probably like to suggest that in Hungary today the only way for a politician to exert pressure is to call, or perhaps personally reprimand the journalist or the editor-in-chief.

In line with the company protocoll

Origo.hu is published by Origo Zrt., this latter owned by Magyar Telekom. Deutsche Telekom is a majority shareholder in MT, while the German state is a shareholder of Deutsche Telekom.

A considerable and visible part of MT’s revenues comes from business with the Hungarian state. The company has a section and director responsible for government relations. Mr. Balázs Máthé, chief officer for legal and corporate affairs is the highest level contact person for the government at the telecom giant. For quite some time Mr. Máthé has negotiated directly with Mr. Lázár, himself the person in charge of telecommunications in the government. We could not ask Mr. Máthé whether Mr. Lázár had ever complained to him about articles published by Origo, because he is not authorized to speak about matters related to the website.

It is certain, however, that many times complaints were received at Origo headquarters as if they came from Mr. Máthé who complained about

“János Lázár being sad”.

Immediately after Fidesz’s election victory in 2010 nobody at MT would have payed attention to Mr. Lázár or his spirits: relations between the company and the government was at its lowest point. The special tax levied on the telecoms sector meant a serious blow to the company, while Vodafone (whose chairman, Mr. György Beck known to have links to the left was at the same time pushed to the side) started to snatch MT’s goverment contracts. Hungarian-German relations were anything but cordial. Hungarian politicians also found it hard to deal with MT’s Chairman-CEO, Mr. Christopher Mattheisen, an American.

Then in the autumn of 2012 Prime Minister Viktor Orbán and the German Chancellor, Angela Merkel met in a surprisingly good atmosphere. Parallel with the warming of German-Hungarian diplomatic relations MT’s positions in Hungary started to improve, too.

Here comes the great fixer

Kerstin Günther ( wikimedia.org)
Kerstin Günther ( wikimedia.org)

In April 2013 the position of Chairman-CEO was split up (allegedly at the request of the Hungarian government).

47 year old Kerstin Günther was elected Chairwoman of the Board. She was very familiar with the Hungarian political environment. Her career in telecommunications started in the 1990’s in Hungary. She learnt her professional skills at the dawn of Deutsche Telekom’s international acquisitions, at the height of the Hungarian privatisation process. She has known for long all the main actors in Hungarian politics and business. This is of course no coincidence: between 1997 and 2001 she was in charge of regulatory affairs, i.e. she had to negotiate with the Hungarian government. If the János Lázárs of the time had grievances, she was the one to inform.

She is considered an executor hard as nails by the industry (just as Mr. Lázár in Hungarian politics) and the market takes her more seriously than Mr. Mattheisen.

Arriving to Hungary she was given the task to fix any conflict between MT and the government.

For instance keeping the frequencies used by T-Mobil, its mobile service provider, was essential for MT. Frequencies are owned by the state which only leases them for a fixed time. There are also bulk contracts and lots of other business relations between the company and the state. If MT wants to grow, it often may need state approval, for instance a permit by the Hungarian competition authority. Special taxes levied on the telecoms industry and the failed attempt by the government to set up a mobile service provider represented essential problems involving billions of forints.

By late 2013 the game was up for Origo.hu

In 2013 the most important issue for MT was the future of frequencies used by mobile telecom companies. For a long time the Hungarian government kept suggesting that they would be reallocated. MT’s largest source of revenues is T-Mobil, therefore it was crucial for the company to keep it alive. In the autumn of 2013 the government decided to let the three established mobile service providers^ in Hungary continue their operations until 2022. In exchange they had to pay a total of 100 billion forints, of which MT paid about 35 billion. Extremely hard bargaining produced this result.

As part of the deal the Hungarian government asked MT to either reign in Origo or let it go.

A high-ranking member of the government has also confirmed to 444.hu that the deal included expectations relating to Origo.hu.

These were agreed upon by Ms. Günther and Mr. Lázár.

Several sources have confirmed that Ms. Günther had negotiated with Mr. Lázár even before she came to Budapest as the new chairwoman. During their discussions Mr. Lázár presented the conditions that he wanted met in exchange for keeping the frequency. Among them was the request that Origo should refrain from criticizing the government. Mr. Lázár gave Ms. Günther a 150-page study. It contained a detailed comparative analysis of news published by Hirado.hu, the website of the state-owned MTVA media company, and Origo.hu. This supposedly proved that

in comparison to Hirado.hu, Origo.hu dramatically opposes the government.

Later this study was frequently quoted within MT.

Since the media business produces losses and does not fit into its profile, it is far less important for MT than the mobile business. Therefore the Board, led by Ms. Günther also tried to force Origo Zrt. to make the portal accept politically motivated requests, so that they do not hinder other business deals.

Another important event took place at the end of 2013. Sales and marketing director Mr. István Kozári left Origo. CEO Mr. Miklós Vaszily became directly responsible for the sales division. Business executives at Origo Zrt. have for long been grieving about the disproportionally low share of Origo.hu, the market leader, in the government’s spending on online advertising. State spending mostly went to Index.hu, Origo.hu’s competitor. In 2008 most of the government money spent on digital publicity was channelled to Origo.hu, whose share at that time amounted to 34.6% of the total. In 2012, however, the publisher of Index, CEMP led the list with 58.2%. Such a large-scale restructuration of government spending cannot be explained by the evolution of the market.

In the last months of 2013, Origo.hu’s position began to improve in this respect too. IMG, the agency in charge of the government’s digital advertising budget started to spend money at Origo more often. IMG and by extension the Hungarian government became an important advertising client.

Today they are buddies

As the business relations between the government and MT, and therefore the government and Origo Zrt. kept improving, company executives increasingly thought that if a problematic article is published, MT’s entire business in Hungary may be endangered, The company attributed economic consequences to political complaints. Criticism of the content was understood as blackmail in disguise. When Mr Máthé, the Chief Officer in charge of government relations brought news about Mr. Lázár or somebody else being sad, it meant that something was wrong with an article, a scandal had broken out, and journalists should take care not to let something similar happen again.

In 2013 editors at Origo.hu received such messages ever more often and with ever greater severity. They could feel in more and more cases that political discontent should be considered seriously. Recently Mr. Lázár stated in government circles that

“we should do something about RTL Klub^^ and Origo”.

Mr. Lázár has never hidden his aversion to RTL, for instance on Wednesday he said that RTL Klub is threatening the country.

Notwithstanding, in most cases Origo.hu’s editors did not change their journalistic standards. According to most journalists at the website Mr. Sáling was ousted because Origo Zrt.’s executives became fed up with this and wanted political requests at last implemented by the editors.

Nothing may represent this embrace better than what Mr. Lázár announced at his parliamentary hearing^^^ early Wednesday afternoon, one day after Mr. Sáling had been dismissed. Origo’s owner, MT and the Hungarian government will launch a joint development project worth hundreds of billions of forints.

This is how a professional powerhouse falls apart

A week ago it would have been inconceivable at an Origo.hu editorial meeting that journalists, eyes moist with tears, interrupt the CEO with angry shouts. But this is what happened on Tuesday when Mr. Sáling’s ousting was announced. At 9:30 AM it was communicated that Mr. Sáling would leave the company as “mutually agreed upon”. This took many as a surprise. They indignantly asked questions, shouting whether this was due to political pressure. The CEO did not explicitly say no, he rather said that this was not the main point. Journalists were angry and embittered, and the atmosphere was passionate according to all accounts. A sound recording of the meeting was later leaked to the public.

Mr. Sáling, known as an iron-handed editor, had led the portal since November to the satisfaction of many. Origo.hu’s editorial staff that had slightly slackened before his appointment was shaken up, perfectly covered the elections and started to implement Mr. Sáling’s professional ideas. Mr. Sáling had a vision about the portal’s future, and nobody could seriously believe that he was ousted for professional reasons.

Following a few remarkably shaky attempts to explain things, company executives on Wednesday almost implored journalists to stay at least until September. According to our sources those who are ready to continue until September were offered a bonus equalling three monthly wages.

Many will not wait until September and quit on Wednesday. The statement published on Tuesday by the journalists clearly shows that they refuse to take seriously the official justification offered by the company, according to which Mr. Sáling was ousted because consumer habits had changed. The few thousand people who demonstrated before the portal’s headquarters a few hours after the announcement probably did not believe it either.

(Péter Erdélyi – Péter Magyari – Gergő Plankó)

* Mr. Viktor Orbán, Prime Minister of Hungary, leader of the governing Fidesz party
** The governing party, in power since 2010.
*** One of the most important stories of the 2014 election campaign. Mr. Rogán is an influential member of Fidesz, whose Budapest flat turned out to be massively bigger than he had officially declared in a written statement.
**** 1 USD = 223 Hungarian Forints.
^ T-Mobil, Vodafone and Norwegian-owned Telenor.
^^ One of the two large Hungarian TV stations, owned by the German RTL Group, itself owned mostly by Bertelsmann. Along with Origo it is (was) widely considered as one of the two large Hungarian media organizations independent of Fidesz business interests.
^^^ After the 2014 elections, Mr. Orbán appointed Mr. Lázár Minister of State, the second most influential position in the government.
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