Radio Ink - Radio's Premier Management & Marketing Magazine

November 18, 2009: Emmis Communications' national radio station in Hungary, Slager, was taken off the air today. As reported earlier, the Hungarian National Radio and Television Board (ORTT) declined to renew Emmis' license after 12 years and instead awarded it to a consortium sympathetic to a Hungarian political party. The country's other national radio license went to the a group believed to be aligned with the other national party.

"We are deeply disappointed, not only for Emmis and our people, but most of all for the people of Hungary," Emmis Chairman/CEO Jeff Smulyan said. "Whenever freedom and democracy are taken away, every citizen suffers immeasurably. All of Hungary has suffered today."

Emmis said it will seek relief in the courts in Hungary and the European Union.

Emmis says it invested about $170 million in the station over the time it held the license, employed an all-Hungarian staff, and operated in a politically non-partisan manner. Slager was the highest-rated station in Hungary, reaching 3.5 million listeners a week out of a population of 10 million, and Emmis says its bid "would have demonstrably generated the most income for the Hungarian treasury."

A resolution was introduced in the House asking the Hungarian government to reverse the decision; that resolution cites a report in the Financial Times that said Emmis and the holder of the other national license, German-Austrian firm Accession Mezzanine, were approached by representatives of the Fidesz and Socialist parties and told they could have their licenses extended if they political parties received 50 percent of the equity in the stations, and that the companies refused, after which the Fidesz and Socialist delegates to the ORTT voted to award the licenses to the "politically connected" bidders instead.

The resolution continues, "The House of Representatives (1) (1) condemns the recent action by the Hungarian National Radio and Television Board that awarded the national community radio licenses; (2) encourages the Republic of Hungary to respect the rule of law and treat foreign investors fairly; and (3) encourages the Republic of Hungary to maintain its commitment to a free and independent press."

Emmis owns about a 60 percent stake in Slager, and the decision to take away its license and that of the other national station, Danubius, has been widely criticized, the Wall Street Journal reports. The head of the ORTT resigned over the board's decision. 

The loss of Slager is a significant financial blow to Emmis; the station brought in $23.9 million revenues in the year ended February 28, 2008, the company earlier reported in an SEC filing, and $6.4 million in the six months ended August 31, 2009.