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Euronews says there is no risk to its editorial independence following the announcement that it will be acquired by a Portuguese venture-capital firm that has a close family tie to Hungarian Prime Minister Viktor Orbán and strong corporate links to the business ecosystem around him.
Alpac Capital’s links to Hungary have become such a hot topic of discussion that even Orbán himself weighed into the fray on Tuesday, playing down any suggestion of political interference in the multilingual broadcaster and quipping that his Fidesz party had no plans to forge a “world empire.”
On Friday, the pan-European TV channel announced that fund manager Alpac Capital signed an agreement to acquire the 88 percent of shares in Euronews held by Egyptian businessman Naguib Sawiris.
The sensitivity around the acquisition centers on Orbán’s close ties to Mário David, a former lawmaker in the European Parliament and father of Alpac’s chief executive. The Portuguese investment firm has an office in Budapest, has received capital from big Hungarian corporates and Hungary’s Foreign Minister Péter Szijjártó helped promote the launch of an Alpac fund aimed at regional investments in 2017.
When pressed on Alpac Capital’s connections to Hungary, Euronews Chief Executive Michael Peters told POLITICO that despite the company’s CEO and managing partner Pedro Vargas David having “financial connections,” he is “100 percent certain that his financial projects will never interfere with Euronews.”
“I have every guarantee of editorial independence,” Peters said.
The comments from Peters were supported by several Euronews employees, who told POLITICO that they were confident the new ownership wouldn’t encroach on editorial independence after the deal is finalized next year.
Still, as part of the change in ownership, Euronews’ independent editorial board will now include three people handpicked by Alpac, Peters confirmed.
The Orbán connections
One staffer at the broadcaster, once tipped as Europe’s answer to CNN, told POLITICO that Pedro Vargas David recently spoke to employees from the Lyon-based company as part of a meeting coordinated by the French staff representative body, the Comité social et économique (CSE), where he gave assurances that “there’s no intention to interfere editorially.”
POLITICO was unable to reach David directly.
A spokesperson for Alpac said in an emailed statement that “any concerns of possible impact on Euronews’ editorial freedom are unfounded” and that during his meeting with employees David “relayed his commitment to Europe and espousing core tenets of the union such as democracy and freedom. There will be no confusion of roles between the owner and the editorial staff.”
“We have decided to invest in Euronews because we believe in its tremendous potential and consider it to be an undervalued asset,” the spokesperson said.
But despite Alpac’s assurances, there is currently an “internal debate” among employees about the impact of the acquisition, one Euronews staff member said.
That internal debate derives from a long history of interactions between Alpac Capital and Hungary.
The firm has an office in Budapest and has received funding in the past from Hungary’s official export credit agency, EXIM, Hungarian energy company MOL and Hungary’s OTP Bank.
All three Hungarian companies said they were not involved in the Euronews investment. They have, however, provided funding for Alpac’s ‘East West’ venture capital fund, which according to the company’s website “invests in Hungarian, Portuguese and neighbouring countries’ SMEs with scale-up potential.”
Hungarian Foreign Minister Szijjártó himself attended a 2017 event alongside Alpac CEO David where the investments were announced.
Alpac Capital has also collaborated with 4iG, a Hungarian technology company. The firm is closely associated with the ruling Fidesz party: Orbán’s close childhood friend Lőrinc Mészáros used to own a stake, and the company received most of its revenue from the Hungarian state last year. Alpac’s David is a member of the 4iG board.
“Our collaboration with Alpac Capital is critical to 4iG’s growth strategy,” 4iG CEO Gellért Jászai, who has previously worked for other Mészáros holdings, said earlier this year.
The CEO also has a family connection to Hungary’s decision-makers.
Even as Hungarian state companies were investing in Alpac, David’s father, Mário David, was serving as an adviser to Orbán.
A former member of the European Parliament from Portugal’s Social Democratic Party, the elder David became friends with Orbán in the early 1990s, and in the 2010s served as a vocal defender of Hungary’s Fidesz within the center-right European People’s Party.
In 2016, Orbán personally presented David with a state award “as a true friend” of the country and the former Portuguese MEP has travelled abroad alongside the Hungarian leader. For example, in 2018 he accompanied Orbán to Austria and in 2019 he was part of the official Hungarian delegation during the Hungarian leader’s visit to Cape Verde.
In a 2018 interview with Portugal’s Expresso, the ex-MEP said his work for the Hungarian leader was “pro bono.”
Despite the top-level denials of any interference, the connections between Alpac Capital and Hungarian leadership have sparked more skeptical comments from a number of observers in Brussels and Budapest.
Ágnes Urbán, director of the think tank Mertek Media Monitor, said that under the new ownership, Euronews could be exploited as a “pseudo-independent” media outpost of the Hungarian government, where it maintains a semblance of independence, but takes a “far less critical” stance with regard to Hungary and other so-called illiberal democracies.
“There is no business rationale with this acquisition,” Urbán added, comparing the acquisition to the logic of creating Hungary’s Central European Press and Media Foundation (KESMA), a pro-Orbán entity that controls about 500 media organizations.
Like KESMA, the planned Euronews buyout “is a political investment,” Urbán said.
While inside Hungary the ruling Fidesz party indirectly controls large swaths of the media landscape, over the past few years businesspeople linked to Hungary’s government have begun investing in media outside the country’s borders.
In Slovenia, Fidesz-linked individuals and companies have invested in media supportive of Orbán ally Janez Janša, the country’s prime minister. Hungarian investors have also bought multiple media outlets in North Macedonia.
Meanwhile, Orbán loyalists have made forays into English-language news with an internet portal called V4NA, which runs anti-migration, far-right content. In addition, a Hungarian foundation that is the recipient of significant amounts of state funding also provides money for Remix News, an English-language website that often promotes Orbán’s political messages.
“Viktor Orbán has a track record of acquiring news media and then influencing their editorial agenda,” German Green MEP Daniel Freund said. “The acquisition of Euronews by a [company] with direct connections to the Hungarian prime minister’s office is worrisome. It must not in any shape or form have an impact on the reporting about the developments in Hungary,” he added.
For the European Commission in Brussels, which has long adopted an antagonistic stance towards Orbán’s media operations — the Euronews buyout doesn’t come without risks.
The EU executive, which also plays a part in bankrolling Euronews, said this week that it was monitoring developments closely, “to make sure that any changes in the company’s management or editorial workflows do not impact our contractual arrangements.”
The Commission has a three-year Framework Partnership Agreement with the Lyon-headquartered broadcaster, which runs until the end of 2023. The agreement does not contain direct funding obligations but allows the Commission to sign specific contracts for funding.
In November, €16 million worth of these contracts were signed. As part of the agreement, Euronews was required to provide information on its editorial oversights and programming priorities among other metrics, a Commission spokesperson said.
However, the Commission also said that relations with Euronews can be “terminated” based on certain conditions, including evidence of a lack of editorial independence.
“But at present, we consider that there are no grounds to think that Euronews is in a situation of breach of our contract. The latest performance audit was reassuring,” the spokesperson said.
Asked at a press conference on Tuesday whether the Euronews acquisition amounts to a form of Fidesz influence over the news outlet, Orbán acknowledged that he had known Mário David well from their time as vice presidents of the European People’s Party and noted they both currently served in leadership positions at the Centrist Democrat International, a Christian Democrat organization.
“That is all, and nothing more,” he said.
Paul Ames contributed reporting.
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