Wednesday, June 27, 2001

Kavan tries to head off TV3 fight Officials fear Lauder repeat in spat over new network By Lisa Gonderinger While it is unclear just how this country will fare in its high-profile media tussle with U.S. cosmetics heir Ronald Lauder, officials are apparently taking precautions to avoid similar embarrassments. During his May visit to the United States, Foreign Minister Jan Kavan was present at a meeting that included Bernard Winograd, senior managing director of Prudential Investment Management, and Vladimir Zelezny, owner of Prague's TV Nova. While none of the participants divulged the purpose of the encounter, Czech media reported that Zelezny proposed a merger between Nova, which he owns, and TV3. Winograd's firm is a major investor in TV3, the country's youngest and least-stable private network. Although some speculated that Kavan was present to help Zelezny seal a deal, spokesman Ales Pospisil said the foreign minister attended only to "represent the interests of the Czech Republic, to save its good name abroad. We have not overstepped our purpose." In a prepared statement, Zelezny called the reports of his proposed merger "absurd," politically motivated lies. Pospisil said Kavan and other government officials are worried that TV3, which has found tough going in the Czech market, is contemplating taking legal action in an effort obtain new and essential broadcast frequencies. TV3's managers are convinced Zelezny's influence is standing in the way of obtaining them. The media market has been hard on foreign investors. Lauder, who had initially joined with Zelezny to launch TV Nova, has been the most illustrious casualty. His Central Media Enterprises, which has invested in emerging TV markets across the former Soviet empire, claims Zelezny pushed him out of the business and cost him millions. The fight between the two men has been waged in court over two years without a clear winner. But Lauder has been public in his anti-Czech anger. He testified before the U.S. Congress and bought full-page ads in international newspapers warning of the dangers of investing in the Czech Republic. He sued not only Zelezny, but the Czech government as well, saying it failed to help protect his investment. The case will be decided by an international arbitration court. The quarrel did not dissuade Winograd's Prudential and Peter Gerwe, an American who is one of the largest investors in Russian media. The two launched TV3 last year, hoping to compete with Nova and TV Prima. But the fledgling station has been unable to expand its reach -- a key to boosting advertising revenues -- because it can't get the necessary frequencies, which must be granted by the government. Pospisil said Winograd visited here in March and, with Gerwe, met with Kavan, former Finance Minister Pavel Mertlik and Culture Minister Pavel Dostal. Winograd argued that the Radio and TV Broadcasting Council, the body that formally grants the frequencies, "doesn't play the role it's supposed to play" and that it was unfairly hampering TV3's growth, Pospisil said. "Our answer was, quite logically, we can hardly influence the work of the council, which is completely independent," Pospisil said. "It would be very unwise for us to push them to change their minds." Lisa Gonderinger's e-mail address is lgonderinger@praguepost.cz More business stories Losing power Growing effort to delay CEZ's trip to the auction block Blackout threatened Country's power workers ask for job guarantees Rumors of low bids plague Komercni's sale Questions raised about manipulation, deficits Movers & Shakers Compaq's Czech chief U.S.-bound Spaces & Places Garden is getting new life E-world From treasure hunting to word processing Local firm helps transform PlayStations into desktop computers Making movies on the go Kal's Korner