WHAT IS HAPPENING WITH THE OLDEST BOSNIAN-HERZEGOVINIAN DAILY: OSLOBODJENJE TO BE SOLD FOR 4.7 MILLION MARKS
The oldest Bosnian-Herzegovinian daily newspaper Oslobodjenje
has started a process of re-capitalization which will end with the sale of 51
percent of ownership of the newspaper for 4.7 million convertible marks
(approximately 2.4 million EUR). The paper’s former director Janez Cadez
told us that this is an internal offer to sell shares to prevent a direct
competitor from buying the paper and establishing market monopoly. This clearly
shows that the Oslobodjenje management wants to prevent the possibility
of the increasingly wealthy Dnevni Avaz buying the paper and taking
control over daily publishing in the Federation of Bosnia-Herzegovina. Avaz,
namely, recently bought the OKO printing house, provoking protests from
newspaper houses which maintain that the highest circulation
Bosnian-Herzegovinian paper has created a monopoly by owning the two largest
printing houses.
Cadez explained that an “internal offer” means that the
paper will not go on the market. Instead, the Oslobodjenje Supervisory
Board will look for a buyer, taking into account his reputation and offered
development program. Cadez maintains that the set price for majority ownership
over a newspaper with such a tradition and reputation, as well as considerable
housing property, is not high. He would like the well-known companies WAZ or Styria,
which have already established a presence in South East Europe, to take over Oslobodjenje.
This move taken by Oslobodjenje’s current owners is a
result of the fact that the paper has been encountering major financial
problems and has not been able to establish a good market position. The paper’s
current circulation is 13,000 copies, with 24 percent of unsold copies. For
example, the rival Dnevni Avaz has a triple circulation and numerous
weekly editions covering almost all areas of social life. Oslobodjenje
has only been selling more copies than the third daily in Sarajevo, Jutarnje
Novine, but this paper has recently reinforced its journalistic staff and
increased the number of pages. If criminal charges (for scheming terrorist
activities!) against the Jutarnje Novine owner do not affect the paper’s
quality, it is expected that this paper will also “overtake” Oslobodjenje.
However, as Janez Cadez told us, even the current Oslobodjenje
circulation in Bosnian circumstances offers self-sustainability, but the
paper’s major problem is a big marketing shortfall. He said that after the ownership
transformation, when the paper was supposed to start going on an upward line,
the marketing manager died and his deputy broke his leg. This tragic situation
should not have posed a strategic problem in most countries, but in
Bosnia-Herzegovina, which has a major staffing shortage, good quality marketing
experts cost a lot of money and Oslobodjenje was unable to accept their
costly conditions.
One Cannot
Live off Past Glory
Oslobodjenje is a newspaper with a
bright tradition. It started publishing in the wartime year of 1943 as a
newspaper of the “working people” and covering territories held by Tito’s
partisans, but very soon it became an established Bosnian-Herzegovinian daily.
In the socialist period it did not differ much from other dailies in the former
Yugoslavia. It experienced a big rise in 1989 when, at a time of already
advancing nationalism, it was declared newspaper of the year in the former
Yugoslavia due to its relatively neutral political position. The paper’s
concept, until the beginning of the war, was based on constructive criticism –
first of the communist authorities, and following parliamentary elections of
the new national structures. But what is most important is that the paper,
thanks to good and objective reporting, and primarily thanks to good
journalists, remained immune from the nationalistic hysteria that was later to
turn into war. It was a media outlet where people from all ethnic groups truly
worked equally.
During the war, despite extremely difficult conditions, Oslobodjenje
continued to come our regularly, becoming a symbol of Sarajevo’s defense and
defense of civil values of Bosnian-Herzegovinian society. The editors-in-chief
– first Kemal Kurspahic and then Mehmed Halilovic – although they
were unable to save its property, saved the paper’s journalistic face, which
did not succumb almost for a single moment to the then trend of spreading
ethnic hatred through the media. The Oslobodjenje building was located
on the very frontline and was destroyed at the beginning of the war. Although
the lower floors of the big edifice have been renovated, the burnt down
high-rise still stands as a symbol of the wartime Sarajevo. However, we have
found out that activities have been started to tear it down altogether to make
the Oslobodjenje compound safer.
In 1995, with the appearance of Dnevni Avaz, a
private paper close at that time to the Party of Democratic Action (SDA), Oslobodjenje
got its first rival. Thanks to speedy reaction, undemanding form of content and
the fact that it had a pronounced ethnic note, Avaz quickly became the
most read newspaper in the Bosniak-majority part of the Federation of
Bosnia-Herzegovina. Oslobodjenje failed to transform itself in
journalistic terms, insisting on slower commentary and political forms. Later
attempts to introduce non-political and sensationalist forms were unsuccessful
and dispersed its readership even more.
Unsuccessful
Entry of Kmecka Druzba
In the meantime the paper was privatized by its employees.
Re-capitalization was soon carried out and Kmecka Druzba from Slovenia
bought 39 percent of the paper. Other owners were 26 percent employees, and 18
percent businessman Temin Dedic, who publishes Oslobodjenje
International in Germany, while the rest belongs to smaller shareholders
from abroad. In the new re-capitalization that we mentioned earlier, a buyer is
being sought for 51 percent of the paper’s ownership, whilst the current
ownership will be reduced proportionately to the 49 percent remaining after the
sale.
However, when Kmecka Druzba entered the paper two
years ago it mostly failed in bringing the expected progress. Fresh money from
this powerful Slovenian company did not come even close to covering the paper’s
needs. At first, the largest shareholder did not even send its own people to
Sarajevo, but rather played the so-called consultation card.
The difficult material situation resulted in an employees’
strike a year ago, which lasted from May 21 to May 23. Oslobodjenje did
not appear in newsstands for three days, which shocked former employees and the
general public. The paper had never stopped coming out, not even during the
bloody siege of Sarajevo. Employees demanded payment of overdue salaries, as
well as dismissal of the paper’s management, which they claimed was operating
non-transparently and spending too much money on business trips, even buying
company cars while not paying employees.
After these shocks, Kmecka Druzba became involved
more actively in solving the problem. The paper’s management resigned,
including long-time General Manager Salko Hasanefendic. The Slovenian
partner sent Janez Cadez, former director of TV Slovenia, to act as temporary
director. Cadez managed to move things from standstill at Oslobodjenje.
The circulation, which in the meantime had fallen below 10,000, rose somewhat
and the young journalist leadership led by Senka Kurtovic, which took
over editing the paper following the strike, stabilized the paper’s
journalistic quality.
Speaking for Mediaonline,
Cadez detects the problems he encountered upon arriving in the paper. He
believes his company made a mistake by not sending a professional Slovenian
team with money to Sarajevo right after the acquisition to solve economic
problems and make good strategic moves in partnership with the local
management. In his opinion, one of the solutions would have been to transform Oslobodjenje
into a state newspaper accepted in both entities. Of course, in order to embark
upon such a project, or any other for that matter, according to Cadez,
comprehensive research must be carried out to establish what readers in
Bosnia-Herzegovina want. However, there was no money or even staffing resources
to implement something like that. In addition to the earlier mentioned
marketing problem, the Oslobodjenje management also encountered a
problem when Avaz bought the OKO printing house, which is located in the
Oslobodjenje building and which is where the paper was printed. The
management had to deal with the problem of changing the printing house, which
took almost two months.
Kmecka Druzba is a Slovenian financial
group which invests strongly, among other fields, in the media. In Slovenia
they own six radio stations and the paper Kmecki Glas. They established a
presence in Bosnia-Herzegovina through the privatization funds BIG and ABDS.
The acquisition of part of Oslobodjenje is their first investment in the
local media. We asked Kmecka Druzba Director Matjaz Gantar why
the company decided to go into business with Oslobodjenje. He replied
that one of Kmecka Druzba’s strategic orientations are the media, where
the future lies. He said they saw great development opportunities in
Bosnia-Herzegovina which has an underdeveloped media market, but they
miscalculated a little. “Specifically at Oslobodjenje, despite putting a
lot of effort into the project, we underestimated the difficulties faced by Oslobodjenje,
due to which rehabilitation has been relatively unsuccessful so far,” says
Gantar, but his next sentence indicates a desire to want to sell the paper. “As
a minority owner, we are not very optimistic because the other shareholders
failed to support our proposed rehabilitation measures. We are convinced that,
if things were the other way around – if our proposals were accepted – Oslobodjenje
would become a fully competitive and successful company.” Gantar did not want
to explain the reason for disagreement between Kmecka Druzba and the
other owners, referring us to “those in Sarajevo.” The local Oslobodjenje
management also declined to comment on these allegations, telling us that there
had not been any particular misunderstandings. Janez Cadez was a little more
specific explaining that any disagreement among the owners has been resolved by
the Supervisory Board decision to sell majority ownership for 4.7 million KM.
This is the only way out, he said.
Getting
Out of the Tight Spot
A day before talking to us, Janez Cadez handed over his
duties to Enes Terzic, the new director appointed by the Supervisory
Board. Cadez says Kmecka Druzba, and particularly he who had been in the
heart of the problem the entire time, understand that it is necessary for the
paper’s director to be someone from the local community, who knows well both
the business and media situation and is therefore able to make better moves.
Restoration of directorship to local hands by no way means that “Slovenians are
pulling out,” as certain Bosnian-Herzegovinian media alleged; it rather means a
desire to make Oslobodjenje more natural, Cadez told us.
Enes
Terzic, former director of Zetra Olympic Center, has a similar opinion. He told
us the basic problem was that the Slovenians had not become Oslobodjenje’s
majority owners. He plans to implement a several-point program:
re-capitalization as the main goal, using all material resources available to Oslobodjenje,
primarily reconstruction of its still destroyed building, and launching new
editions. He says no ownership structure can change the paper’s policy, which
will continue to be based on three goals – objective reporting, democratization
of society, and preservation of Bosnia as a state. This clearly shows that Oslobodjenje
will remain primarily a political paper, but that is basically what its current
and former readers are most interested in. It will also try to find its future
among the dominantly politically-infected public. After all, that is what most
daily newspapers in Europe are doing.
The Supervisory Board’s search for someone willing to buy
47,000 shares and pay 4.7 million marks will not be easy. The ethnically and
territorially divided market in Bosnia-Herzegovina does not offer much
perspective. But the paper will make a truly new start only when it is sold.
With more money and certainly a much more demanding owner, the paper will have
to put serious effort into conquering the market in order to achieve the main
objective – profit. Oslobodjenje, although by far the oldest
Bosnian-Herzegovinian daily, will have to start from scratch in many regards.
Radenko Udovicic
is Editor in chief of News agency Safax (Sarajevo). Media Online 2002. All
rights reserved.