State oil-firm buyout of media group sparks Polish fears

PKN Orlen, the state-owned refiner, announced the deal in December.

The company, that had almost €24.5bn in sales revenue in 2019, decided to buy a local media publisher (with around €88m revenue and €1.9m of net profit in 2019) out of "purely business reasons", Daniel Obajtek, the company CEO, explained to MPs on Friday (8 January) in a special hearing in parliament.

"We are looking for diversification", Obajtek said.

Maciej Małecki, state secretary in the ministry of state assets praised the move as "Re-Polonisation" of a media supposedly "dominated by German capital", during the Friday hearing. But many journalists, media experts and opposition fear for a further decrease in media pluralism and press freedom in the country.

"This transaction turns previously private, independent media into state media. And we know how that ends" Iwona Śledzińska-Katarasinka, vice-president of Civic Platform, told this website - referring to the dramatic changes that have taken place in public television and radio since 2015. Namely, the loss of journalistic independence, large-scale dismissals and increased politicisation.

"The government claims that German publishers curb journalistic independence - but that's not our experience. We actually fear this will only start now", a Polska Press employee, who wish to remain anonymous, told this website.

Polska Press, currently owned by German Verlagsgruppe Passau, owns 20 out of 24 regional dailies, as well as 120 local weeklies, 500 local news sites reaching 17.4m users per month, and six large printing houses. It employs 760 journalists.

In many local and regional markets Polska Press holds a dominant position. Its titles mostly reach small local audiences in rural areas - an important constituency for the governing Law & Justice (PiS) party.

"It's hard not to see this transaction as purely political", Adam Szynol, a media academic from Wroclaw University, told this website.

"For local elections, the local press is the main channel for reaching out to the electorate", he added.

The transaction "not only increases a risk of political pressure and control" but also potentially contributes to "deeper polarisation and partisanship in the already divided Polish press sector", professor Beata Klimkiewicz, media academic from Jagiellonian University, told EUobserver.

'New media order'

The Law and Justice electoral programme in 2019 said that "…a majority of the media is controlled by the opposition" and that one of its main policy aims is to "construct a new media order".

"The Orlen takeover can be seen as one step in a series of related activities that aim to counterweight major media groups such as Agora [publisher of the leftwing Gazeta Wyborcza] and TVN/Discovery [owner of a government-critical TV station] and empower [a] right-wing media camp."

However, this is not the first move for the oil giant into the media market.

In 2020 the company took over Ruch – the second-largest press distributor, delivering newspapers to over 15,000 kiosks in Poland - and created its own media house, aggregating advertising budgets from large state-owned firms.

The acquisition of Polska Press still has to be approved by UOKIK, Poland's competition authority.

Adam Bodnar, Poland's ombudsman, has called on UOKIK to "protect the citizens' right to reliable information" and "shield the media market from political pressure".

But UOKiK responded that the transaction will only be examined in regard to competition rules - and not media pluralism or press freedom.

The office had recently blocked the acquisition of Eurozet, the owner of Radio Zet (one of the largest radio stations in Poland), by Agora (the publisher of Gazeta Wyborcza, a leftwing independent daily). The office claimed that the acquisition would limit competition in radio markets by creating a duopoly.

But many see this as a politically-motivated decision.

"Based on UOKiK decision regarding Agora I would expect that the Office will also block Orlen transaction as Polska Press is already a monopoly on the local media market", Adam Szynol told this website, warning that "if the deal goes through, there will be local markets where PKN Orlen will hold a dominant position both in press production and distribution".

Many national and international journalists associations have protested against the acquisition as a threat to press freedom.

Reporters without Borders warned that "Polska Press is just the start".

"While the government promises "deconcentration" of the independent media, its plan is (…) to concentrate them in its own hands", RSF wrote on Twitter.

Since 2015 Poland has fallen dramatically in the press-freedom rankings, from 18th in 2015 to 62nd last year.

Poland already rates highly in risks to media pluralism due to the "lack of relevant regulatory safeguards limiting political control over media outlets", according to Klimkiewicz in a Media Pluralism in Digital Age report ordered by European Commission.

PKN Orlen, in a response to EUobserver, wrote that "the whole transaction was conducted in compliance with legal regulations" and that suggesting otherwise is "illegitimate" and could be seen as "an attack on company's image".

The company runs six refineries in Poland, the Czech Republic and Lithuania and extractive operations in Poland and Canada.

It is currently proceeding with two major acquisitions of state-owned companies in the fuel and energy sector – Grupa LOTOS (an oil refiner) and PGNiG (a gas refiner).

Last year it has finalised the acquisition of Energa, an electricity producer.