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Media Market -> Bosnia and Herzegovina
WHAT IS HAPPENING WITH THE OLDEST BOSNIAN-HERZEGOVINIAN DAILY: OSLOBODJENJE TO BE SOLD FOR 4.7 MILLION MARKS
03.05.2002: Radenko Udovicic

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.

 
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