Since recent amplifications in speculation that the Radio and Television Council could announce their decision on the allocation of the national television concession by mid July, the opposing candidates have begun to deliver each potentially controversial detail about their competitors to the press.

In Nacional’s editorial offices, among other things, several documents have arrived on the methods used to form the consortium between RTL, Podravka, Agrokor, HVB Croatia and Pinta TV Three which, judging by their competitors, would suggest that RTL controls considerably more than 33% of the consortium permitted by the current law. According to their social contract dated 15 May 2003, in that consortium: CLT-UFA from Luxembourg (RTL) in the company RTL has 33% of the shares, Pinta TV Three has 25% of the shares, Podravka, Agrokor and Atlantic Group each have 11.5% of the shares, and HVB Bank Croatia has 7.5%.

However, in the legal records as representatives of a nine-member supervisory board, there are four people who represent the interests of RTL in addition to Darko Marinac on behalf of Podravka, Ante Todorić on behalf of Agrokor, Goran Gazivoda on behalf of HVB Croatia, Emil Tedeschi on behalf of Atlantic Group and Ana Babić on behalf of Pinta TV three. The interests of RTL are represented by the President of the supervisory board, Jean Charles De Keyser from Belgium, Dirk Gerkens from Germany, Elmar Heggen from Germany, and Thomas Rabe, also from Germany. The competitors against the RTL consortium suspect that the interests of RTL in the supervisory board are truly represented by Ana Babić, who was furthermore appointed Vice President of the supervisory board. If this information is correct, these members could then represent the majority together and at any moment call upon the other members of the consortium.

Competitor’s suspicions regarding Ana Babić and RTL’s consortium fueled Nacional to attempt to authenticate the agreements on the sale and transfer of business shares among members of the consortium and RTL’s company CLT-UFA, which originally founded RTL in Zagreb with a base capital amounting to 750,000 kuna. According to these agreements, CLT-UFA transferred shares in RTL to each member in the consortium, and each share was then paid by the members. HVB Bank Croatia paid 56,200 kuna for its 7.5 % share, and Agrokor, Podravka, and Atlantic Group each paid 86,200 kuna for their shares.

According to the contracts delivered to Nacional, only Pinta TV Three did not pay RTL for its 25% share in the consortium, which was nominally worth 187,600 kuna. In their contract, the paragraph that discussed the sale of their shares was left out; so that it appears that Pinta TV Three received shares without any fee. RTL’s consortium competition see this as a sign that RTL will actually, through Pinta TV Three, control an additional 25% of the share, totaling 58% of the consortium. The structure of the supervisory board, in which the representatives of RTL alongside Ana Babić would have the majority, leads their competitors to raise suspicions that RTL really wants to control more than the legally permissible 33% share of the consortium.

Dobrivoj Keber from Pinta TV Three told Nacional that the agreement was formed when there was an opportunity for his company to receive a portion of their shares without charge, such that the cost of his share is taken off his wages for working in the consortium if they win the concession.

“This was an actual concept at the time these agreements were formed, but later this idea was rejected. At the time, that was not yet known, we decided to draw up a contract where it cannot be seen that we paid our shares, which we are not legally obliged to do. We have paid for our shares and I am prepared to give you access to the deposit slip which will confirm this. I would be happy if that was how it was written in the contract because then I could ask for my money back”, Dobrivoj Keper told Nacional, adding how there was no chance that his company would act as a front for RTL.

These accusations are not the only ones mentioned regarding RTL’s consortium by their competitors. Last week, Nacional received information that Imelda Public, from the Public Relations agency, apparently arranged to do market research for the RTL consortium. This information further suggested that RTL’s consortium is favored by SDP because the Director of Imelda Public is Ivan Račan, son of Premier Ivica Račan. Ivan Račan denied the information received by Nacional: “The assignment of the national television concession is an ongoing issue and I assume that tensions will continue to rise within the next few months until the concession is granted. We have not worked, or are working, for any one consortium in this competition”, Ivan Račan told Nacional.

The thesis on the apparent inclination of SDP towards RTL’s consortium appeared even earlier. In part, this was believed because Keber is considered to be close to SDP, as well HNS, and it is partly believed to be true because the co-owner of EPH, Ninoslav Pavić, was recently invited to see Premier Račan, along with Erich Schumann, President of the Management Board of WAZ, the joint owner of EPH and the owner of 7.5% of RTL shares.

Even though the shares of Pavić’s strategic partner, WAZ, in RTL is not legally debatable and creates no obstacles that would keep him from entering the competition for this concession, RTL’s consortium competitors believe that the Premier, by receiving Pavić and Schumann in his office, has indirectly proven that he has given the go-ahead to RTL’s consortium. One member of RTL’s consortium has unofficially reported to Nacional that Pavić is really lobbying RTL’s consortium to the limit, adding that Pavić’s behavior has no element that can be disputable.

“Pavić is really acting like a loyal partner to WAZ, as though he wants to help them succeed in this competition. If that consortium wins the third program, it is assumable that Pavić would easily negotiate business with them and have several favorable business conditions for cooperation. It is all very logical, legitimate, and falls within the framework of legal regulations”, one member of RTL’s consortium told Nacional.

The opposing consortium between the News Corporation, Croatian Telecom, and the Tobacco Factory Rovinj claim that their lobby desires that the decision on the assignment of the third program is made as soon as possible and most certainly before the adoption of the Telecommunications Act and the new Electronic Media Act. Their opposition claims that one of the working versions of the Electronic Media Act in Article 53 includes an injunction requiring Croatia Telecom to sell their shares in that consortium. Allegedly, it forbade anyone broadcasting over any radio, television, or telephone signal to be the bearer of a radio or television concession. Consortium opposition claims that thanks to the lobby by Croatia Telecom, that article has now been changed so that broadcast operators for radio or television programs can be the bearer of a radio or television concession. That change leaves Croatia Telecom the opportunity to be the bearer of the concession even after the adoption of that law.

At the end of last week, Nacional received information that there was a conflict between Slavko Linić and Deputy Premier, Goran Granić at the last Government session. Apparently Goran Granić delay the decision as whether or not Parliament should vote on the Telecommunications Act until the moment when Linić briefly left the session. If that information was correct, then Goran Granić was one of the members of the Government who are lenient towards making the decision on the bearer of the concession for channel three before the adoption of the new Act. Several adversaries to the consortium between SBS, Večernji List, the Croatian Olympic Committee, and the Croatian Musicians Union have, on the basis of that information, began to speculate that Granić is leaning towards Večernji List because the new Electronic Media Act does not allow the bearer to hold more than 10% of shares in daily newspapers that are printed in more than 3,000 copies to be the bearer of a national television concession. However, Goran Granić stated that the information on the allegation that he blocked the entrance of that Act into Parliamentary procedure is completely without foundation.

One member of the consortium between the News Corporation, Croatia Telecom, and the Tobacco Factory Rovinj stated how their consortium believes that the decision for the bearer of the concession for channel three should be completed before the adoption of the new Act as all opposing members in the competition could then find procedural basis to complain if they do not get the concession. That would, according to his assertion, needlessly discredit the competition and the Government.

One high ranked Government official reported to Nacional that the competition alone has several deficiencies. In the competition documentation, there is a mentioned possibility of utilizing 48 transmitters on the basic network that allegedly satisfies coverage of Croatia regulated by the Telecommunications Act. That network, however, leaves a portion of Istria, many of the islands, and the central part of Dalmatia uncovered. In a sense, the concession for utilizing these transmitters would, to some extent, be similar to the transmitters used by Nova TV, who also do not have coverage over the entire territory of Croatia.

In order to reach complete coverage over the entire Croatian territory, the concessionary would have to use an extra 289 transmitters for a full network. Meanwhile, in the competition documentation, it apparently is not precisely defined whether or not the concessionary would be permitted to utilize the extra transmitters, which those responsible believe to be the composition of the competition.

Several of the candidates for the concession with whom Nacional spoke do not see any particular problems with this, and point out that it is only a technical problem which will be resolved with additional negotiations. They see a larger problem in the fact that the utilization of 48 transmitters costs the Government 17 million kunas annually, and for an additional 289 transmitters, the Government would have to pay 40 million kunas more per year. While one group of candidates believe that these prices are too high, one high ranked Government official told Nacional that this is not an issue, and added that it is a minimally compensated world wide opportunity for unusually low annual concession rates totaling only €50,000.

With all that, once again, rumors have begun to circle that members of the Radio and Television Council, who have the final decision on the allotment of the concession, have been given instructions on how to vote. Not one member of the consortium that are competing for the concession for channel three, be it in official or unofficial conversations with Nacional, wants to believe that. All candidates hope that the Council’s vote will be independent. That expectation suggests how each candidate is defending their own interests while acting within the borders of permissible and correct behavior, accepting the readiness of each one of them to leak every deceptive controversial detail on the competition to the press.