Media financing is the least transparent area of our media system. There is no reliable data on the total amount of money in the media industry, especially public funds, no data on the sources and forms of financing, and there is even less information about the purpose of these funds and their effects. At the same time, this is also the least regulated aspect of the media system. None of the media laws deal with this issue. If not the most closely guarded secret, media financing is, at least, one of the least approachable secrets. It is not uncommon that, when it comes to the money they give or receive, public authorities and the media prefer to pay a fine rather than comply with the decision of the Commissioner for Information of Public Importance. Finally, media financing is the least explored element of the media system. In Serbia there are no experts on the political economy of the media, neither among economists nor among communication experts.
The Anti-Corruption Council’s latest report about the media from 2015 is very welcome, since it offers plenty of new information about media financing. The first report the Council made about the media, in 2011 was revolutionary. It lifted a veil off the dark secret of ownership and funding of the media. The new Report is focused exclusively on finances. It reveals that the black box of media funding is very complex and that it has many “compartments”, hiding a large number of players involved in various symbiotic and parasitic relationships.
Even though the media system reform, from the beginning of the 2000s, proclaimed the market model as a basis of media financing, a combination of state and public media financing existed all of these years. In addition, the media market is small, poor, overwhelmed, and hyper-competitive. Many claim that the amalgam which arose from it cannot even be called a “media industry”, because the media market does not even exist, and this thing that bears its name is just an extension of the state media system by other means. Instead of reducing the number of media, since the market cannot contain them, the number of media increases on a yearly basis. From about 1,100 in 2011, the number of media houses increased to over 1,400 in 2015. Most of them are operating with financial losses, even those with the most popular commercial production. This alone is an indication that the market is no longer a main factor that determines the fate of the media, nor is profit the main benefit for media owners and financiers. In a system in which profit is small or even non-existent, some other types of benefits compensate the economic loss suffered by media owners and financiers.
The Report of the Anti-Corruption Council shows that the media, regardless of its market orientation, manage to obtain as much public funds as possible, outside of the market, in various manners. This reallocation of funds knows no rules or control, and the media use it to extend their existence at the cost of their integrity.
The absence of regulations
The absence of legal regulation of media financing is clearly presented in the Council’s Report, especially financing that comes from public resources. In monitoring the flows of media financing, the Council could only implement the Law on Public Procurements. The complete inefficiency of this Law was shown precisely through the discovery of cash flows in media financing. The modernized version of this Law, from 2013, still makes it possible to bypass the intentions of the law in a variety of ways – through direct contracting, low-value public procurements, by simulating competitiveness, etc.
The domestic legal framework still does not recognize the problem of the influence of public funding on media freedom. According to the Council of Europe, the purpose of the state funds intended for the media is only to help inform citizens more effectively, and the funds have the form of public aid. Therefore, in allocating these funds, the state should treat the media in a just and impartial manner. Even though Serbia is a member of the Council of Europe, it does not comply with these standards. Ever since subsidies of less than 30 million Euros have been excluded from domestic state aid regulations (by a Government decree at the end of 2011), none of these types of media financing is regarded as a type of state aid, and therefore is not subject to these regulations.
The Law on Advertising, from 2005, did not regard the decisions on advertising as a possible type of media discrimination. This Law contained no regulations regarding state advertising. The new Law on Advertising was not included in a set of new reform laws adopted in 2014. More importantly, the regulation of public advertising was not included in the new Law on Advertising, which was adopted by the National Assembly in January 2016. Thus, there are still no legal provisions which regulate the decision making about the scope of advertising budgets of public authorities, the criteria used, the manner of budget allocation, nor are there regulations on public availability of the data on public advertising, or the control of spending, in order to prevent the misuse of public funds.
The lack of legal regulations on public authorities’ advertising creates a basis for arbitrary and discriminatory decision making about which activities it is justified to spend taxpayer’s money advertising, to what extent and in which media. In a situation of chronic financial scarcity, obtaining an advertising contract from state authorities or public enterprises can often present the line between survival and extinction for the media. Therefore, state advertising is an efficient potential mechanism for political pressure on the media, either through selecting them for the placement of advertising content, or through excluding them from advertising plans.
Ignoring the public interest
The Council’s report showed that there is a well-developed network of public funds flowing into the media, and that its implementation, and even more, its rationality and efficiency, is completely uncontrolled.
This diverse range of financial interventions in the media includes classic advertising contracts, contracts on lease of broadcasting time, business cooperation agreements, sponsorship agreements, donation agreements, contracts on provision of media services, as well as contracts on promotion of projects and activities.
The review of the content of said contracts, conducted by the Anti-Corruption Council, shows that the rationality of spending public funds is often questionable, especially in the case of public enterprises holding a monopolistic position on the market. The ads for the fight against electricity theft appear to be questionable, as well as many others.
From the standpoint of public interest, the most problematic issue is that the public funds are not spent for campaigns in service of common good, but for creating a positive image about the work of state authorities and public enterprises or their management, and in extreme cases – the political structures behind them.
Through many innovative types of contracts, containing diverse provisions, state authorities and public enterprises often ask the media for only one thing – promotional services, provided in the form of informative content, so that the audience would not recognize them as propaganda.
The contracts presented in the Council’s report show that the authorities requesting or sponsoring media services specifically ask, for example, for publication of “PR articles”; “increased editorial attention of a directly appointed journalist”; “regular reporting from press conferences”; publication of “thematic interviews with experts” provided by the contracting authority; guest appearances of public authority representatives and representatives of public enterprises in news programs; informing the public on the working conditions and results achieved by specific public bodies; organizing interviews and contact programs with representatives of public enterprises; development and publication of PR articles about projects implemented by specific public authorities, etc. Sometimes the contracts go as far as to specify an obligation of the media to “positively present” the contracting authority through media monitoring of its activities, to “work from an affirmative position towards the primary activities of the contracting authority” or to perform a direct affirmation of the sponsors, for instance through publication of articles written by the sponsor’s management representatives.
The report offers a large number of evidence of public authorities using public funds, under the guise of public interest, for the promotion of specific political or economic interests. This proves that public institutions continue to do what they always did, only through new innovative forms. Previously, the public authorities used budget subsidiaries to promote content affirming ruling structures in state media, or they used local budget initially intended for “public information of local importance” to finance “the provision of information services about the work of local self-government and public enterprises,” clearly defining which areas of work and which concrete activities journalists should present.
A number of contracts presented in the report, concluded between public authorities and media, on financing partial political interests, indicate that there is a reason to take seriously the warning that the participants in the transition processes often disregard and underestimate the ability of authoritarianism for structural and functional mimicry. A media researcher from Belarus warned about such a danger, almost twenty years ago. Symptoms of an authoritarian syndrome can be read throughout the Council’s report; a syndrome which, through the entire transition process, obstructs the creation of a basis for an autonomous media system. None of the democratic governments wanted media as a mechanism for controlling the ruling structures and an instrument of the public, and thus none of them initiated a media reform which would enable the creation of such media.
In addition, the report warns about the fact that the legislative envisioned by the new media laws is far from sufficient for the establishment of the desired role of the media in a democratic system; that the media Registry – the way it is now planned – will not be enough to provide financial transparency, and that the sector analysis, which should be conducted by a Regulatory body, should deal with said issues.
Victims or culprits
The Council’s report shows that there is almost no major media that has not entered into some kind of an agreement which requires them to provide propaganda services for its financiers.
This shows that the media have little choice in their business strategies, that it is very hard for them to withstand the economic chains placed on them by public sources of funding. The process of media restructuring, which has been going on since 2000, failed to create a stable economic basis for media development, or a model of media financing which stimulates media to serve the public interest. Alternative sources of financing, which existed during the ‘90s, either do not exist anymore, or have lost their importance. The answer to the question why journalists cannot get out of the economic pitfalls of the state is not a lack of journalistic courage, of which they are often accused, but the lack of financiers who are prepared to fund a different kind of media.
The main forms of state financial interventions in the media sector – subsidies, state advertising, contracts with the media on provision of various types of services, a number of sponsorships and donations – serve as mechanisms for transfer of public authorities’ financial power to a political influence on the media, that is – as mechanisms of indirect, soft media censorship and control, as well as an efficient source of financing media obedience.
Project co-financing, as a new form of public financing of the media, is only in the initial stages of its development, and is going through all of the typical “childhood diseases”. Its adequacy for solving media issues in the existing economic context is yet to be established.
The report of the Anti-Corruption Council puts a focus on how the media can get out of the traps of corruptive relations with the state, which are built into the media financing structures.
One aspect of this question is whether the journalists are only the victims in this situation, or are they an integral part of the structures and relations in a media system which undermines free, critical, and responsible journalism, and prevent its survival with their own professional behavior.
The majority of the media community’s representatives that can be heard in the public scene claim that they are only victims. However, research including interviews with journalists show that journalists view themselves both as victims and as culprits. While some believe that journalists are not organized enough to defend professional integrity, others believe that they were not sufficiently included in media system reform, which did not go in a good direction.
The media system reform is not only journalists’ and media workers’ problem. Regulation of financing from public sources is not only a question of enabling a non-discriminatory treatment of the media, but an issue of providing the conditions for production of content of public interest, and in such a manner that the public funds are being allocated in a public procedure, under known, equal, and just conditions.
Serbia is an economically underdeveloped society, in the process of creating an entrepreneurial class of citizens, and wealth redistribution which is still ongoing; with a partocratic political system, and clientelistic relations between the institutions which are easily put into the service of the interests of the ruling political majority; with an unconsolidated democracy, weak rule of law, weak basis of parties in interest structures of the society, lack of societal consensus on societal transformation and with a strong need of ruling parties to control the media in order to obtain public support for their own policies and build a consensus.
All of the said characteristics of the society make the efforts for media reform a part of the fight for the development of democracy. Therefore, the subjects of the media system reform, in the public interest, should be sought out among the participants who support the development of democracy, and the reform itself should focus on changing media financing structures as soon as possible.