ERSTE Foundation invests in media diversity in Eastern Europe

ERSTE Foundation invests in media diversity in Eastern Europe

ERSTE Foundation, core shareholder of Erste Group, presented a financial instrument for the preservation of media diversity at a prominent discussion at the Concordia Press Club in Vienna on 13 November: Pluralis, a company that invests in independent media that is managed by MDIF.

For the first time, ERSTE Foundation has invested in shares in a company with a social objective: Plūrālis. The Dutch limited liability company wants to preserve media diversity in Eastern Europe by making targeted investments in media. It sees strong owners as the best prerequisite for guaranteeing the editorial independence of media. It is a completely new approach that has convinced ERSTE Foundation, which has therefore invested 2.5 million euros in Plūrālis.

Plūrālis was founded in 2021 with the aim of raising around 100 million euros to invest specifically in Eastern European media. To date, around 50 million euros in mixed capital (shares, bonds and funding from other foundations) has been raised. The aim of the investments is to ensure that at least one independent media outlet can survive in each European country.

Plūrālis currently has three media companies in its portfolio: the Polish publishing house Gremi Media, which publishes the daily newspaper Rzeczpospolita, the Slovakian publishing house Petit Press, publisher of the daily newspaper SME, and the Croatian news platform Further investments are being planned.

On 13 November, a panel of experts at the Concordia Press Club discussed the background that makes an investment company like Pluralis necessary and the challenges that arise from an ever-shrinking range of trustworthy media.

Boris Marte, CEO of ERSTE Foundation, officially announced the investment in Pluralis and explained why the core shareholder of Erste Group took this step: “Ever since we have been supporting the strengthening of democracies in Central and Eastern Europe, i.e. from the very beginning, we have also invested in independent journalism, especially in the training and further education of journalists. Now we are realising that these well-trained media professionals have fewer and fewer media outlets in which they can publish. Yet we absolutely need trustworthy news sources. Without trust, there is no courage to shape the future. And we need that more than ever in these times of multiple crises.”

Patrice Schneider is Chief Strategy Officer of MDIF, the non-profit investment fund with over 20 years of experience in the defence of free media, which developed and manages Pluralis. He emphasises that Plūrālis is explicitly non-partisan. “Pluralis invests in independent, successful media companies that practise responsible, quality journalism, regardless of their editorial orientation.”

For many years, professional news media have ensured the supply of trustworthy information. But quality media are now struggling. Their business models are suffering worldwide due to the loss of advertising revenue, a reluctance to pay for reliable information and competition from a flood of disinformation campaigns on social media. The Managing Director of the Concordia Press Club, Daniela Kraus, pointed out this situation, which is dangerous for democracy, in her welcoming address.

Beata Balogová, Editor-in-Chief of the Slovakian daily SME, reported from the editorial office of a medium that was once partially owned by an oligarch and is now part of the Pluralis portfolio. Her very personal report from Bratislava, a few weeks after the re-election of Robert Fico and his SMER party, is gloomy. “Since the election, the new government has already blacklisted the daily SME. The Prime Minister refuses to answer our questions and some ministers are labelling us as Soros media. They are now legitimising conspiracy media, inviting people from Russian propaganda sites to press conferences and favouring them over my journalists. They have also launched an attack on non-profit organisations and are considering a law on “foreign agents”, similar to the one in Hungary under Orbán. Unfortunately, being part of an EU country does not provide security for independent journalism. That’s why we need media owners with integrity who are interested in good journalism and good journalists.”

Oscar Bronner, the founder and former publisher of the Austrian magazines “Trend”, “Profil” and the daily newspaper “Der Standard”, of which he is still the publisher today, can certainly be counted among the media owners of integrity in Austria. He pointed out how difficult it is today, even in prosperous countries like Austria, to produce economically successful media.

Media have a particularly difficult time in countries where governments have little interest in investigative journalism and, together with interest groups close to them, want to restrict free reporting through laws, taxation or takeovers. Media diversity and media freedom are currently under threat in many places, especially in Eastern Europe. But democracies thrive on the social and political diversity of their populations, which should be reflected in the broad spectrum of opinions and media offerings. A free market can guarantee competition between the providers of different media content.

Clemens Pig, Managing Director of APA, has just published a book on this topic: “Democracy dies in Darkness”. He sees technical developments, especially the possibilities opened up by artificial intelligence, as a way out of the dilemma.

“Plūrālis brings an innovative solution to a market that is under high political and economic pressure but is highly relevant for functioning democracies. The investments facilitate digitalisation, cash flow and growth. Value creation is to be achieved in particular by diversifying revenues in order to secure the independence of media companies in the long term,” Patrice Schneider said.

Tessa Szyszkowitz, freelance journalist for Falter, moderated the discussion, but also contributed her own experiences. How relevant the topic of independent reporting is in the Czech Republic, a country that only recently voted out a prime minister who headed a huge media empire, can be seen from the fact that she herself chairs a “Committee for Editorial Independence” of the Czech media house Economia (Hospodářské noviny, Aktuálně.cz, ekonom), which has set up this committee as a supervisory body.

Boris Marte had the closing words: “At ERSTE Foundation, we know what a strong ownership role means for the independence of a company. Being a solid owner of Erste Group is even a task in our statutes and in the Savings Bank Act.” The concept that Plūrālis is based on a diversity of investors was convincing. “There is no majority shareholder. We are in the good company of other charitable foundations, major European publishers who can contribute expertise and other impact investors. Plūrālis is therefore not a kind of “good oligarch”, but an investor group with a diverse supervisory body that ensures that the impact objective – strengthening the editorial independence of media in Eastern Europe – is always at the centre.”

About ERSTE Foundation

The ERSTE Foundation creates infrastructures and innovation for a changing Europe: in society, economy, and culture. As the main shareholder of Erste Group, the ERSTE Foundation ensures the independent future of one of the largest financial service providers in Central, Eastern, and Southeastern Europe. As a private Austrian savings bank foundation, the foundation is committed to the common good.