The Polish media market finds itself in an interesting position. Following a streak of market moves and reshufflings, the media landscape seems to have, to an extent, polarized. To get an insight into the market ins and outs, as well as expectations for the future, we reached out to Wiercinski Kwiecinski Baehr Partner Agnieszka Wiercinska-Kruzewska.
Lay of the Land
“It’s worth mentioning that media that pursue a pro-government agenda are supported by large injections of funds from the state budget,” Wiercinska-Kruzewska begins. Pro-government media outlets, she says, also benefit from “lucrative advertising contracts with state-owned companies.” Looking at the long run, she feels that this will reflect in the quality of content served to the citizens of Poland and that the first symptoms of this “can already be clearly seen in the public television, where news broadcasts are focused on delivering one-sided messages, consistent with the current needs of the ruling party.”
The media landscape is dominated by state-owned sources. For example, Telewizja Polska-TVP alone enjoys almost a 10% share of total viewership. Moreover, last year, state-owned oil company “Orlen acquired a stake in Polska Press, a group gathering the largest regional newspaper chain in the country,” Wiercinska-Kruzewska reports, but the acquisition was not smooth. “The Ombudsman tried to intervene and challenged the decision of the President of the Office of Competition and Consumer Protection (OCCP) by questioning the validity of the assessment that the concentration would not threaten competition on any market,” she explains. However, in June 2022, the courts dismissed the Ombudsman’s appeal.
“One might be tempted to say that most of the local press in Poland is in government hands,” Wiercinska-Kruzewska continues. This level of authoritative influence has already born consequences, for instance in the field of radio, where “political agenda-driven moves at public broadcaster Polskie Radio have resulted in mass departures of flagship journalists in 2019 and 2020,” ultimately leading to a significant drop in listenership, she explains.
Important Moves
And the radio market was not immune to major moves. “In February 2019, Agora acquired 40% of Eurozet’s shares, for PLN 130 million, while 60% was acquired by Czech fund SFS Ventures,” Wiercinska-Kruzewska says. According to the acquisition agreement, Agora has a call option for the remaining shares, which it chose to exercise a few months later. After applying to the OCCP for transaction approval, however, Agora was initially denied.
“The OCCP conducted a two-stage proceeding that included an analysis of the markets in which both companies operate,” she reports. The justification for the acquisition ban stated that “the combined companies together with the RMF FM would create a duopoly, with a 70% share in the radio market.” Still, in May 2022, the “Court of Competition and Consumer Protection fully reversed the decision of the President of the OCCP which had prohibited Agora from buying a controlling stake in Eurozet,” she says. While the verdict is not yet final, the OCCP plans to file an appeal. Wiercinska-Kruzewska says that Agora is the “publisher of one of the largest press titles in Poland, critical of the current ruling coalition.” She adds that it was peculiar that the OCCP had opted for a straight block, instead of a more common “model of preconditions, the implementation of which by the acquirer is supposed to ensure the proper functioning of competition in the market.” The final outcome is yet to be decided.
Further, Wiercinska-Kruzewska indicates that some global transactions could have reverberations in Poland as well. “In April 2022, Discovery and AT&T announced the completion of a transaction that resulted in the merger of WarnerMedia and Discovery.” She reports that the merger creates an entity that comprises, among others, “the largest commercial broadcaster operating on the Polish market, namely the TVN Discovery Group.” In late 2021, the Polish National Broadcasting Council sought to deny the renewal of two of TVN’s channels, she says, but has recently announced that it would hold off until it could examine the new ownership structure, following the merger. The license renewal, however, was never in any question “from the perspective of both Polish and EU law interpretation, as confirmed by many experts. The actions of the regulator were a case of tardiness unfortunately dictated by political considerations, which was widely criticized at the national and EU level,” Wiercinska-Kruzewska explains.
Trends and Drivers
Analyzing the trends in the Polish media markets, as well as their drivers, Wiercinska-Kruzewska stresses that there is a “disturbing phenomenon” of “far-reaching polarization” to be observed. “The focusing of newsrooms on the performance of the ruling party’s agenda on the one hand, or on its criticism on the other, translates into worse-quality information on both sides,” she says. “In this year’s Reporters Without Borders media freedom ranking, Poland was ranked 66th, the lowest in the history of the ranking.” Still, such polarization might have positive externalities. “Initiatives of completely independent media, financed by listeners, are developing,” Wiercinska-Kruzewska indicates. “There are also developing initiatives of ambitious journalism delivered in the form of podcasts,” which she trusts to be positive occurrences.
Furthermore, Wiercinska-Kruzewska points to the existing significant activity of the National Broadcasting Council in the digital sphere. The Polish national regulator is feeling “more confident” when it comes to regulating digital sources. “The implementation of the Digital Services Act and the Digital Markets Act, once adopted at the EU level, will bring further changes, which will require closer cooperation in an area that has so far been supervised by three independent bodies: the National Broadcasting Council, Office of Competition and Consumer Protection, and Office for Personal Data Protection,” which she says is a good trend, “provided it is followed by good legislation.”
Playing Favorites
Overall, it appears that the Polish media market is edging towards the creation of strong “market winds” favoring the government – in particular in the advertising sector. “In 2021, state-owned companies spent 7% more on advertising in the media than in 2020,” Wiercinska-Kruzewska says. “The structure of total state-owned companies’ spending indicates a weak correlation between the level of advertising spending and the market position of a medium, which clearly indicates the presence of non-market criteria for spending decisions.”
While she reports that the largest state-owned advertiser is PKN Orlen – which allocated PLN 36.1 million for daily press advertisements – there is not a lot of room for those media that are critical of the government. “No resources were allocated for advertising by state-owned companies in Newsweek and Tygodnik Powszechny – titles critical towards authorities,” she reports, while indicating the disproportions are “glaring” in other media as well, including radio and newspapers.
Continuing with media landscape disruptions, the Polish Sejm passed the so-called “Lex TVN” in December 2021, a piece of legislation seeking to “prevent the American company Discovery from owning a majority stake in the TVN Group,” Wiercinska-Kruzewska reports. However, the proposed legislation is not yet in effect. “The rejection of the Senate’s veto caused the bill to be sent to the President,” she explains. On December 27, 2021, the President refused to sign the bill – as a result, the bill was ultimately blocked and is not being processed further,” she says.
The Twisting Road Ahead
Looking to the future, Wiercinska-Kruzewska shares her hopes of “independent grassroots journalistic initiatives gaining the support of society and becoming more important in the process of shaping public opinion.” She hopes that quality legislation will pass at both the EU and the national level, in particular regarding the illegal dissemination of copyright-protected content, hate speech and the protection of journalists, and a unified approach towards ownership of media with related companies outside the EU.
Making accurate predictions, however, is tricky. “The outlook for the media market in Poland over the next five years is difficult,” Wiercinska-Kruzewska concludes. “One of the decisive factors is the outcome of the parliamentary elections, which are scheduled to take place in 2023 – we can already see how much politics can interfere with the media market.”
This Article was originally published in Issue 9.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
