PRAGUE --- The third anniversary of Czech broadcaster Nova TV Tuesday put into perspective just how fast and phenomenal has been the rise and success of Central European Media Enterprises (CME) --- and how unpopular success can be in this part of the world.
CME is the Bermuda-based company, founded by Estee Lauder heir Ronald Lauder. Run by CME president and CEO Leonard Fertig, it has formed alliances with local TV license-holders across Central and Eastern Europe, with Nova TV being the region's first national private station. Its strategy of bringing slick and professional Western-style management and programming into territories previously dependent upon stodgy state-controlled stations is paying off in a big way. Viewers and ad dollars are flocking to the CME stations.
Nova surprised even its management by zooming up the market share charts to claim more than 70% of viewers at its high point one year ago. Though that share has since dipped to 65% in the second and third quarters of 1996, Nova continues to generate fat profits. At the end of its first year, the station earned $10 million. By the end of the second year, the figure had quadrupled to $40 million --- the cost of launching Nova in the first place. (Results for the third year aren't due until the end of March.)
Under the leadership of general manager Vladimir Zelezny, Nova has had to weather a series of controversies. A legal question of a separation between the license holding company and the program provider had been questioned by the Czech Council of Radio and Television for the past year.
Next, accusations of political favoritism and a rigged gameshow hit the headlines. The latest flap involves a transfer of ownership in Nova. The station sometimes seems to be the source of headline-grabbing stories that rival its own taste for sensational stories on its newscasts. Others say that Nova's success, with Zelezny as its highly visible head, make both a target for criticism. Zelezny has said he plans to fight back with a lawsuit of his own over improper statements.
But CME stands behind the man who it also appointed as president of its TV Stations Group. Zelezny said that CME had given him a loan to buy a 60% share of license-holder CET21. Meanwhile, CME has increased its share in CNTS, the company that operates Nova, from 66% to 86%, buying out the share of original co-owner Czech Savings Bank (though it retains a 2% voting interest). Zelezny maintains that the consolidation of ownership was necessary to ward off attempts at a takeover by three of the nation's largest companies. With Zelezny standing by its side, the ownership transfers mean 93% control of Nova for CME.
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