The Big Bang Theory of MDIF

Buried in the depth of every organization’s institutional memory, a founding legend — a treasured story explaining the organization’s “big bang”– can always be unearthed. In this regard MDLF was blessed with a wonderful big bang: At two meetings held over a period of nine months, George Soros refused to fund the project which was code-named “media bank”. At the end of the third such meeting, on the beautiful sunny morning of May 1, 2005, on a bench in the only park of the small provincial town of Presov, in Slovakia, he finally agreed to take the risk (more to his reputation than to his funds).

“It is not going to work”, he told me, “but I will give you a rope to hang yourself. My Foundation will invest the first $500,000 to test the idea and let’s see what will happen.” With those words, what later became MDLF was given life.

Later, I called Stuart Auerbach, a long-time Washington Post reporter and my partner in crime in the imagining of the media development bank: “Houston, we have a problem,” I said. “GS agreed to fund the project with half a million. There is no way back now.”

“Now that we are in business, we first have to buy you a pin-striped suit,” Stu roared with delight. “You can’t possibly be a banker without one.”

So, this is MDLF’s “big bang” story. This is how the whole adventure started.

Soon after our first meeting with lawyers, we had to abandon the idea of having the word “bank” in the name of the new organization. Too much regulation, we were told, and they advised us to replace it with the word “Fund.” Fine. The words “media” and “development” made it to the name of the new organization unopposed. To be on the safe side and leave no doubt what will be our “core business,” we added the word “loan.” Voila: Media Development Loan Fund. In this way we managed to arrive at, as one branding expert told me a decade and a half later, probably the dullest and most uninspiring name ever given to a functioning organization.

But I have to admit, in mid-1995 we did not think about the name for more than several minutes. The kind of name to give your dream did not appear to be important at all. The dream itself was the only important thing – to create a media development bank. To our surprise, nothing of that kind existed, although it was obvious to us that it was badly needed. The countries of Eastern and Central Europe were in the midst of incredibly painful transitions, shaking off the leftovers of authoritarian pasts, while Yugoslavia was convulsing in bloody civil war. Media was playing a main supporting role in all events in the region. In some countries the media’s role was disgraceful and horrific, and in some countries brave and honorable. In most of the countries it was a mixed bag. But what was beyond dispute was that for the first time in the history of this region, a philosophy, a movement, a process that could be defined as “independent media” emerged. And it badly needed help to take root.

It badly needed all kinds of assistance, but above all, we thought – affordable and “no-strings attached” financing, to level the playing field and allow it to compete with its “dependent competitors” in order to survive. Could there be a more obvious solution to this problem than a media development bank?

Now I know why it looked so simple to us 15 years ago – we had no idea how huge a goal we were aiming to achieve.

Our first misconception was in thinking that we should build an institution of a rigidly financial nature. No grants, no “assistance mentality,” no handouts. We should deliberately insist on a pure business-like approach, and stick only to the business of lending money to independent media companies.

Fifteen years, 100 million US dollars and more than 200 projects later, we know better. Yes, we do lend money, but that is certainly not the only thing we do. Today we know that the most important thing we do – which is not at all so obvious – is facilitate the transfer of highly specialized knowledge about managing media to our clients.

The low-cost financing that we provide is by itself not enough. It is the media expertise we attach to it that makes all the difference. It’s not the money; it is the wrapper in which the money comes that makes the package so effective.

We started to build a rigidly focused bank, but over time we ended up creating a mix between a not-for-profit venture capital fund and a revolving loan fund, with an “added value activity” of knowledge transfer. How and why did that change happen?

Well, you may get an idea of the answer if you take a look into the pages that follow. They aim to provide a “time travel” review of the past 15 years of MDLF’s existence.

These were turbulent and eventful years for the parts of the world in which we work. Countries were liberated or disappeared, wars were fought. Elections were won, lost or stolen. Democracy had its good days, but also had periods of retreat. Epidemics and pandemics erupted and disappeared. The world went through the currency crisis of 1997 in Asia, the ruble collapse and, a decade later, the global financial meltdown.

In the field of media, the changes could not have been more dramatic: from the birth of the Internet, the first websites and “new media” to the founding of Google, YouTube and the launching of the iPad – the media industry was spinning out of control. Known business models collapsed in front of the eyes (or should I say – eyeballs) of new “electronic audiences.”

Swimming in this sea of change, the only way in which we could have kept MDLF relevant was to constantly rethink it, change it, adapt it, and fine-tune it. MDLF began each one of its 15 years slightly modified, retooled and different.

But there was one thing that did not change during those 15 years – our understanding of who our clients are, and the basis of our relationship with them.

We understand that we are in the business of giving a chance to those dedicated, smart and independent people whose mission in life is to make their part of the world a better place through providing their communities with unfiltered, fact-based, independent and professionally produced information. They are providing a space in which different voices can participate in discussions and set the social agenda; providing voters with meaningful information; and giving voice to those who otherwise would be voiceless.

We provide affordable financing for their dreams and ambitions. We invest in their voices.

Hence, the most important legacy of our work – I think – is the creation of an amazing network of clients; an incredible collection of independent media companies, over 80 at this moment, and the people working for them. All of them are striving to be fiercely independent, striving to conduct their media business by adhering to the highest standards of professionalism and led by a mission to serve their communities instead of simply to maximize profits.

The whole purpose of MDLF’s existence is to be the institution of financial support and knowledge support for this network, and to help the network expand.

Great idea, great vision, great mission, great clients, great execution – it does not really matter how many great things one can line up together in one project, all of that greatness is absolutely meaningless unless one manages to attract a group of smart, creative and dedicated people who will adopt the idea and give life to the organization: make it tick, load it with different ideas and new ways of thinking, make it diversified with different types of mindsets, creativity and approaches… MDLF has been incredibly lucky in this respect.

Very early on, an amazing group of people got together to build MDLF. Some of them served as staff, some served on our Board and some were just friends who were helping the idea and the organization from a distance. It is impossible to name them all, but it is possible, we thought, to give them a chance to share a smile from the pages of this publication (see pages….).

I am not going to lie and say it was easy for us to bring MDLF to where it is now: our business-like philosophy to media assistance recognized; our investment approach proven to obtain outstanding results; and our own business model allowing us not only to reach self-sustainability thee years ago, but also to create a sizable “quasi-endowment” to subsidize future projects. The truth is – we’ve also seen our fair share of arguments and resignations, tears and self-doubt, impatience and disbelief. To illustrate that point: for our 5th anniversary, we made T-shirts reading “Our biggest achievement so far is that we are still in business.”

I close the circle by bringing this story back to its beginning – to the man without whom MDLF could not have happened. George Soros put a bit of his funds and a lot of his reputation at risk backing up a project which, he thought, would fail. By doing that, in addition to giving MDLF life, he also gave us a lesson to remember – nothing is impossible. We tried to imprint that same philosophy into MDLF’s mind-set as that is how we look at every funding proposal we receive. Everything else would be a betrayal of our own big bang.

Sasa Vucinic, Managing Director, MDLF, May 2010