Nova's Czech sting

Station struggle may sink SBS merger

By CATHY MEILS

PRAGUE -- In the face of mass resignations at Nova TV and further moves by ousted general manager Vladimir Zelezny to relaunch the station under new ownership, CME-owned service provider CNTS filed for a preliminary injunction against CET 21, the owner of the Nova license.

The complicated dispute over who is in control of Nova, CME or Zelezny, could derail the planned merger between CME and its longtime rival station group SBS.

The injunction would prohibit CET 21 from selling ad time on Nova or purchasing other broadcasting-related services through other companies.

Ads at issue

The injunction request came with news that CET 21 will soon be issuing a tender for an advertising agency to service Nova. Right now, all advertising sales go through CNTS, which collects virtually all of Nova's advertising income.

The ongoing dispute began with the April dismissal of Zelezny as Nova's general director by CME president Fred Klinkhammer.

Zelezny is majority owner of CET 21 and consequently controls the Nova license.

But CME also said it will challenge the legality of Zelezny's ownership of CET 21 in the Prague District Court.

Although the Czech Broadcasting Council admits to irregularities in the transfer of ownership to Zelezny, his status was approved by them.

The battle between CME and Zelezny hangs on the question of whether CNTS has an exclusive agreement with CET 21 to provide services for Nova TV.

Parliaments wants input

Parliament has requested a non-legally binding opinion on the issue from the council before July 25. A council spokesman said that in an opinion two years ago, the council asserted that the agreement is not exclusive.

CET 21 has filed a claim in Prague's Regional Commercial Court to have a May 1997 exclusive service agreement with CNTS declared invalid.

Along with previously announced lawsuits seeking financial compensation, CNTS is demanding $2.7 million for breach of contract, following Zelezny's announcement that CET 21 had signed an agreement with a Czech service provider.

On a higher level, former prime minister Vaclav Klaus rejected Klinkhammer's request for intervention on behalf of CME. Klaus dismissed the request as "unthinkable" and told CME not to contact him again with such a request, according to published reports.

Some members of parliament have also called on the council to be more proactive in the battle for Nova, but the council has responded that it will not intervene unless there is a question of legality involved.

Market skeptical

SBS is set to acquire CME later this year, but market analysts on both sides of the Atlantic say CME's depressed stock price indicates that the market doubts that the transaction will go ahead.

Nova has been the only CME station to generate steady and substantial profit.

With the walkout of over 120 Nova employees, including its two news anchors and virtually its entire investigative news department, it appears that locals are betting on Zelezny's new station over CME's Nova. The latter is viewed here as yet another unwelcome example of foreign imperialists draining profits from a country going into the third year of a recession.