Tycoon takeover puts Euronews funding in focus

Cash injection from Egyptian billionaire raises questions about impartiality.

The opening of its brash, ultra-modern headquarters on a rejuvenated stretch of Lyon’s riverfront marks a new era for Euronews. Not only does the 24-hour TV news network have bright new premises for its journalists; after years of underfunding, it also has a new billionaire owner.

But if the arrival of Naguib Sawiris, a prominent Egyptian businessman, as the controlling shareholder promises greater financial stability for the pan-European broadcaster, it is also feeding unease among lawmakers in Brussels.

Politicians on the left and right in the European Parliament are demanding assurances that Euronews’s editorial independence will be protected after the change of ownership, which was completed last month, and are threatening to block millions in EU funding.

Euronews is the European Union’s biggest media commitment, having received €240 million from Brussels since it launched in 1992 — with €25.5 million pouring into its coffers in 2014, a third of the network’s budget.

Members of the European Parliament will try to block next year’s award if they detect any attempt by the new owner to influence its journalists, MEPs on the Parliament’s culture and education committee told POLITICO. The new ownership has failed to ally politicians’ concerns about editorial independence, they said.

“It has to be made clear that there is absolute editorial autonomy,” Helga Trüpel, a German member of the left-wing Greens/European Free Alliance and vice-chairwoman of the committee, said. “At the moment [it is] not totally transparent whether that is the case.”

Sabine Verheyen, of the centre-right European People’s Party, urged the European Commission to investigate Euronews’s new structures. A “fundamental change” in the editorial approach will result in MEPs withdrawing support for the network, she said.

Sawiris told POLITICO: “I have no agenda myself. I am just a businessman.”

Michael Peters, Euronews chief executive, told POLITICO that Sawiris will not have control over the newsroom.

From his first meeting with the businessman, Peters said, he insisted that ownership would not come with influence over the channel’s editorial decisions.

“If you want to use Euronews to have influence on the content … it’s not worth continuing to speak together,” Peters said he told Sawiris. “I will never permit you to do that. The newsroom will never permit you to do that.”

Sawiris, he said, reassured him that he had no plans to tarnish the channel’s reputation by turning it into a billionaire’s mouthpiece.

The MEPs did not raise specific concerns about Sawiris personally. The Swiss-educated businessman has been politically outspoken in his home country, including opposing the rule of the Muslim Brotherhood, but has also spoken in favor of freedom of the press at the Cairo trial of an Al Jazeera journalist accused of aiding terrorists.

A member of Egypt’s Coptic Christian minority, he is the founder of a satellite television channel, ONTV, which took a strong editorial position against Islamist President Mohamed Morsi, who was removed from power in July 2013 by the military. ONTV has hosted some of Egypt’s most popular programs, including the satirical show “Al Bernameg.” Sawiris’ clash with the Morsi government culminated in his family’s construction company being hit with a tax bill of €700 million.

Euronews was launched in 1992 by a group of public broadcasters to provide a European alternative to CNN, the dominant 24-hour news channel at the time. Euronews now broadcasts to about 4.4 million adults each day in 13 languages, including Arabic, Farsi, Russian, Turkish and Ukrainian.

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The station’s limited budget and multiplicity of languages has required an unconventional, thrifty approach to broadcasting, in which a journalist’s “piece to camera” from the field is dubbed by an army of translator-journalists in Lyon.

In recent years, Euronews suffered funding constraints as the public broadcasters scaled back their commitment, making it more reliant on European taxpayers.

Transparency pledge

Peters wanted to expand the company’s digital operations amid growing competition, but had been starved of funds, so he went searching for new investors. In February Sawiris, one of Egypt’s richest men, bought 53 percent of the company.

Sawiris, whose fortune is estimated by Forbes at $2.9 billion (€2.5 billion), plans to invest €35 million in Euronews. At the time the deal was announced, Sawiris said there would be no change to Euronews’s impartiality after he took over.

Peters said Sawiris’s interest is merely financial. The tycoon was persuaded by Peters’ plan to grow the company over the next five years and believes he could multiply his €35 million investment in a few years, he said.

“I invested in it because it is an undervalued asset,” Sawiris said.

Previous shareholders have not invested enough in the company over the years, he said. Sawiris plans to attract more advertising, put more into marketing and “put some flair” into the programming. “There is potential to create something bigger out of it.”

Sawiris said he envisages the channel becoming profitable and eventually giving up the European Union subsidy.

 

In June, Euronews gave assurances to officials in Brussels that safeguards will be put in place to preserve editorial independence.

According to the Commission, this included the creation of a new independent editorial board which has a veto over strategic editorial decisions; the appointment of an independent oversight body to monitor Euronews’s output, similar to the body that governs the BBC, the U.K.’s public broadcaster; and the publication of annual “transparency reports.”

Peters told POLITICO the editorial board will have 10 members, all journalists or media experts, and Sawiris will appoint three of them. The rest, including the president of the board, will be appointed by public broadcasters that own shares in Euronews, including Italy’s RAI and TV4 of Sweden.

“If Sawiris wants to sack the news director, he cannot do it without the approval of the president of the editorial board,” Peters said.

The editorial board will be appointed by the end of the year and hold its first meeting in January. Paolo Garimberti, a veteran Italian journalist, has been provisionally appointed to the board.

However, MEPs say they still want more assurances about Sawiris’s motivations for owning a European news network and the company’s future plans and finances.

Strategic communications

The change of ownership at Euronews has given new ammunition to Euroskeptic MEPs who oppose any use of public funding to support the broadcaster.

Andrew Lewer, a British member of the European Conservatives and Reformists, said the Commission’s contribution to Euronews is a “poor use of European taxpayers’ money.”

The Commission has not done enough over the years to scrutinize the money it has given to Euronews to ensure value for money, Lewer argued. Some of the channel’s broadcasts are so little-watched that “it would actually be cheaper if newscasters came round to people’s houses and read them the news in person.”

The public subsidy for the privately-owned channel is particularly objectionable now that it is controlled by a billionaire who could easily fund the channel himself, Lewer added.

MEPs from other parties said they have no objection in principle to the Commission giving money to Euronews, because it gives coverage to European issues and institutions that major news outlets often overlook.

“We think it’s a good idea to have this, to give people the opportunity to get informed about what’s going on at the European level,” Verheyen said.

The European Commission has continued to signal its support for the broadcaster, particularly for its strategic value in reaching audiences outside of the EU.

In March, Günther Oettinger, the EU commissioner for digital economy and society, brought the ownership changes to the attention of the College of Commissioners, and stressed the importance of maintaining editorial independence.

The College minutes reveal that the discussion of Euronews’s future then moved onto the geostrategic importance of the station’s programming in countries outside Europe, where it attracted “high audience figures in particular neighboring countries.”

According to the minutes, European Commission President Jean-Claude Juncker intervened in the debate by saying he was “convinced that there was a place for Euronews as a pan-European channel” and called for “everything to be done” to guarantee its editorial independence.

The Commission said Monday it was taking stock of the safeguards adopted by shareholders in June and that it would continue to monitor Euronews’ EU-funded programs.

“Euronews is an independent, private broadcaster,” a Commission spokesperson said in a statement to POLITICO. “The European Commission is not a shareholder and does not have a role in investment decisions.”

The spokesperson said the Commission would not be drawn on the debate among MEPs over whether the money earmarked for Euronews was justified.