In what is bound to become a text-book case of unusual ways to auction television licences, Greece made the first step towards regulating a landscape characterized by anarchy. The three-day bidding process saw five of the seven already broadcasting TV stations losing their temporary licence, and new players emerging in the field.
Existing channels Skai and Antenna were awarded two of the four licenses up for grabs, while the remaining two went to new groups – one linked to shipping magnate Vangelis Marinakis, who owns Greek soccer club Olympiakos, and the other to a construction group owned by Yiannis Kalogritsas.
Bidders for the four stations (a number arbitrarily decided upon by Minister of State, Nikos Pappas, who oversaw the process) spent three days in closed quarters, in the Secratariat of Communications and Information, during the process. They were not allowed to exit the building, use phones, or even communicate with each other, during each of the bidding rounds for the four licenses. Just two of the country’s seven private TV stations survived the gruelling procedure, which managed to add 246 million euros to the state coffers.
Skai took the first license with the smallest bid (43.6 million euros). The second license went to the Toxotis construction group, owned by Kalogritsas, for 52.6 million euros, while Antenna secured the third with the largest bid among the lot, 75.9 million euros.
The Alter Ego group linked to Marinakis bought the fourth license with 73.9 million euros.
This marks the first time that television channels in Greece are asked to pay for their licenses, something long-overdue, since private owned stations operate for 27 years under provisional licenses – or no license at all.
“The result was the creation of a closed oligopoly of established interests in a market that should have opened from the beginning”, said Nikos Pappas, in a written statement to the New York Times. “Taxes weren’t paid, borrowing was excessive (nearly €1.5 billion in debts) and there was a lack of transparency.”
Now the Syriza government argues that this outcome finally puts an end to the collusion between politicans and business interests, that has been at the epicenter of private TV function since its inception in Greece in 1989. Prime Minister, Alexis Tsipras also pledged to allocate the funds towards state welfare programs to assist those in need.
This remains to be seen, though, since any such policy should have the approval of Greece’s lenders. But the staggering amout largely surpasses expectations and raises questions of its own. When the government argued that only four nationwide channels are viable in a small country like Greece, it cited the size of the TV advertising market, the annual revenue of which has been slashed by two-thirds since the crisis erupted in 2009, to under 200 million euros. How can this market support 246 million worth of stations?
But there is another and more pressing question that so far has been unanswered: what will happen to the stations who were left out? The Greek government had said that the new licenses will be activated within 90 days, after an asset control of the new licensees will have been completed. Losing bidders are expected to make use of this period to challenge the outcome of the auction.
After that, Digea, the Greek digital network operator, would be obliged to carry only the four licensed stations nationwide. Other stations can bid for new licenses, either for local transmission, or for specific content (i.e. entertainment, sports, news) – or they can opt to broadcast through subscription cable or satellite platforms, such as Nova or OTE TV. Nea Dimokratia, the leading opposition party, pledged to increse the number of nationwide licenses as far as current technology allows, once it comes to power.
As the new television landscape remains unclear, many government opponents raise concerns for the fate of the employees of the stations that will be forced to cease operations – most specifically Alpha (which has the highest ratings during the past years) and Star. According to the Ministry of Labor, during the first quarter of 2016, the main TV stations in Greece employed 2,639 people, 1,700 of which now face unemployment. Alpha has 537 employees, Star 387 and Mega, the country’s first privately owned TV station, which was left out because of its high pending debts, has 540 employees, who remain unpaid for months.
The government says that, under the provisions of the license bidding process, licensees need to ensure a minimum number of employees and notes that the two new stations will create more jobs in the industry. According to the law, the government reserves the right to revoke the license, if this or other provisions (such as the percentage of original content produced) are not met.
Other media analysts predict more changes to the shifting landscape, such as mergers and synergies among winners and losers, given that two of the new licensees don’t actually own stations, for the time being.
The new status quo is bound to affect viewers in other parts of the world. There are a number of Internet Protocol TV providers operating in Australia, offering an array of Greek channels. The closure of TV stations is bound to affect their operations; some customers have prepaid in advance for services that they will not be receiving, which further complicates matters. Greek-Australian viewers still have a bitter aftertaste, after the abrupt closing down of ERT by the previous government (some say this happened in order for the Digea monopoly to be implemented). A year after the state broadcaster’s reopening, its free signal is yet to arrive in Australia, where it is part of the paid Web TV platforms. Now customers fear that this kind of shutdown will expand to most of the stations received in Australia.