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Media ownership in Latvia

Presented by Anita Kehre, 15.11.2003. in LjublanaPresented by Anita Kehre, 15.11.2003. in Ljublana

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Major research goals

To analyse changes in Latvian media To analyse changes in Latvian media ownership patternsownership patterns

To identify and analyse impact changes To identify and analyse impact changes in the political environment have had on in the political environment have had on the formation of media ownership the formation of media ownership structures into their current formstructures into their current form

To discuss these changes in relation to To discuss these changes in relation to the issue of media pluralismthe issue of media pluralism

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Political and economic background Two transitions at the same timeTwo transitions at the same time

move from totalitarian to democratic move from totalitarian to democratic systemsystem

move from planned to free market move from planned to free market economyeconomy

In addition of political and economic In addition of political and economic transition in Baltic states - Process of transition in Baltic states - Process of decolonisationdecolonisation

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Result – method of privatisation

Gap between formal democratic and Gap between formal democratic and market institutions on one hand and market institutions on one hand and informal practices on the other.informal practices on the other.

Emergence of new political and economic Emergence of new political and economic elite surfaced as result of privatisation that elite surfaced as result of privatisation that was carried out by people involved in was carried out by people involved in political elitepolitical elite

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Growing cleavage in society

Cleavage between poor and wealthyCleavage between poor and wealthy Cleavage along ethnic linesCleavage along ethnic lines Ethno-linguistic cleavage is mEthno-linguistic cleavage is miirrored in the rrored in the

existence of two parallel information spaces existence of two parallel information spaces and two markets for media productsand two markets for media products

market split has generated extra constrains market split has generated extra constrains on the media industry because it’s limited on the media industry because it’s limited sizesize

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Influence of history

Early history – prior 1918Early history – prior 1918 The democratic and authoritarian regime The democratic and authoritarian regime

1918- 19401918- 1940 Totalitarian regime 1940- 1986Totalitarian regime 1940- 1986 National awakening 1986-1991National awakening 1986-1991 1991- benchmark year for the emergence of 1991- benchmark year for the emergence of

private property in legal sense in Latviaprivate property in legal sense in Latvia

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Ownership pattern during Soviet regime Soviet doctrine of social ownership of Soviet doctrine of social ownership of

media was introduced by Lenin in 1917media was introduced by Lenin in 1917 Only three kinds of organizations could Only three kinds of organizations could

own or operate media companiesown or operate media companies Party organizations Party organizations Government bodiesGovernment bodies Public organizationsPublic organizations

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Ownership pattern during Soviet regime Print media belonged to organizationsPrint media belonged to organizations Broadcast were state ownedBroadcast were state owned All media suppliers were controlled by the All media suppliers were controlled by the

Communist partyCommunist party Media ownership was actually concentrated Media ownership was actually concentrated

in hands of the statein hands of the state

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Privatisation

First major changes of Latvian media First major changes of Latvian media system in terms of ownership is linked to system in terms of ownership is linked to process of privatisationprocess of privatisation

Two ways of denationalisation:Two ways of denationalisation: State transferring it’s assets to non – state State transferring it’s assets to non – state

agents (“Diena”)agents (“Diena”) Emergence of new, privately owned Emergence of new, privately owned

companiescompanies

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Spontaneous privatisation

Unlike regular privatisation, can be defined Unlike regular privatisation, can be defined as illegal actionas illegal action

Widely accepted in Latvia in beginning of Widely accepted in Latvia in beginning of 90-ties90-ties

Case of the pressCase of the press

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Concentration of media ownership Second major change in media ownership patternsSecond major change in media ownership patterns Began in mid-1990sBegan in mid-1990s Time of transitional recessionTime of transitional recession Linked to media consolidation and concentration Linked to media consolidation and concentration

of ownershipof ownership Market structures become oligopoliMarket structures become oligopolististic or even c or even

monopolistic, impossible for new newspapers to monopolistic, impossible for new newspapers to enter into marketenter into market

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Regulatory framework

Media regulation consisting of two major Media regulation consisting of two major domains – market regulation and state domains – market regulation and state regulationregulation

Developments in the market have preceded Developments in the market have preceded the state regulations, which have actually the state regulations, which have actually been shaped by lobbying power of agents- been shaped by lobbying power of agents- media ownersmedia owners

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First: Media law

First media law in the post-Communist period was First media law in the post-Communist period was introduce in very end of 1990introduce in very end of 1990

At that time first non-state media outlets had At that time first non-state media outlets had already been in operation for 3-4 yearsalready been in operation for 3-4 years

““not against blank background of new epoch, but not against blank background of new epoch, but in a set of circumstances where new habits and in a set of circumstances where new habits and new patterns were already established.new patterns were already established.

Instead of regulating, it legalized the existing Instead of regulating, it legalized the existing situation in the media market without situation in the media market without distinguishing between press and broadcastdistinguishing between press and broadcast

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Criticism of press law

Delayed press law hindered private initiative in Delayed press law hindered private initiative in the broadcast media as it did not provide any legal the broadcast media as it did not provide any legal foundation for the emergence of private foundation for the emergence of private broabroaddcasterscasters

Law did not address matter of the level of Law did not address matter of the level of ownership concentration that is to be regarded as ownership concentration that is to be regarded as monopolizationmonopolization

Law was adopted too late for development of Law was adopted too late for development of private press because there were few people with private press because there were few people with sufficient resources to launch press operationssufficient resources to launch press operations

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Press law about editorial relations

It stipulates that it is duty of media outlet to It stipulates that it is duty of media outlet to publish materials of it’s owners or publish materials of it’s owners or publisherspublishers

Relationship between owners and editors Relationship between owners and editors and editorial staff is to be regulated on the and editorial staff is to be regulated on the basis of collective agreements. Subasis of collective agreements. Succh h agreements do not exist in practiceagreements do not exist in practice

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Broadcasting law

First adopted in 1992 when first private First adopted in 1992 when first private broadcasters were already operatingbroadcasters were already operating

Law set out principles for de-monopolisation in Law set out principles for de-monopolisation in the broadcast field, specifying that airtime given to the broadcast field, specifying that airtime given to one media company could not exceed 25 % of one media company could not exceed 25 % of total timetotal time

Law established National radio and television Law established National radio and television Council as the regulatory authority Council as the regulatory authority

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Second broadcasting law

Adopted in 1995Adopted in 1995 Main arguments concerned role of public Main arguments concerned role of public

broadcastersbroadcasters Council became politicised institutionCouncil became politicised institution Council supervises all broadcasters, but also Council supervises all broadcasters, but also

acts as the owner of the public service acts as the owner of the public service broadcasters by managing the state’s capital broadcasters by managing the state’s capital shares therein. shares therein.

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Other laws and regulations

General laws, roughly divided into two General laws, roughly divided into two groups:groups:

Contains regulations on concentration of Contains regulations on concentration of ownershipownership

Regulates relationship between owners and Regulates relationship between owners and the management of their companiesthe management of their companies

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Competition law

Specifies that one or more market participants Specifies that one or more market participants achieve a position of dominance when they take achieve a position of dominance when they take oovver at least 40 % of the market shareer at least 40 % of the market share

In general law is designed to prevent dominant In general law is designed to prevent dominant market positions in economic sense, but it does market positions in economic sense, but it does not deal with the social and pluralistic aspectsnot deal with the social and pluralistic aspects

Limitations of foreign ownership in in some Limitations of foreign ownership in in some sectors, including media were stricken away from sectors, including media were stricken away from law in 1996law in 1996

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Commercial law

General provisions on structure and power General provisions on structure and power hierarchy in companyhierarchy in company

No Latvian media company is a public joint stock No Latvian media company is a public joint stock company listed on the stock exchangecompany listed on the stock exchange

Most media companies have few shareholders, Most media companies have few shareholders, management and supervisory boards are just management and supervisory boards are just formalitiesformalities

Does not require high transparency in company Does not require high transparency in company reportsreports

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Conclusions

Latvian media legislation does not impose strict Latvian media legislation does not impose strict regulations on mregulations on meedia concentration outside the dia concentration outside the general provisionsgeneral provisions

There are certain limitations on media concentration There are certain limitations on media concentration in the broadcast media, but there are no regulations in the broadcast media, but there are no regulations concerning cross- media concentrationconcerning cross- media concentration

Legislation concerning media concentration is not Legislation concerning media concentration is not very elaborate because political elite are often very elaborate because political elite are often reluctant to place this issue on the political agenda reluctant to place this issue on the political agenda because media concentration have possitive effect for because media concentration have possitive effect for the political elitethe political elite