MEDIA MAGNATE GRIPES TO THE AMBASSADOR ABOUT

UNCLAS BUENOS AIRES 000973

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SENSITIVE
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STATE FOR INR/R/MR, IGWHA, WHA, WHA/PDA, WHA/BSC
CDR USSOCOM FOR J-2 IAD/LAMA
SOUTHCOM FOR POLAD
NSC FOR JOSE CARDENAS

E.O. 12958: N/A
TAGS: KPAO OPRC PREL KMDR AR
SUBJECT: MEDIA MAGNATE GRIPES TO THE AMBASSADOR ABOUT
KIRCHNER


CLASSIFIED BY: AMBASSADOR E. ANTHONY WAYNE; 1.4 (b),(d)


SUMMARY
--------------


1. (C) In a lunch punctuated by misgivings about the Kirchner
Administration, ailing Clarin giant Hector Magnetto conveyed
to the Ambassador that his vigor has not waned, despite a
throat cancer that has diminished his ability to communicate.
As the Ambassador was feted by Clarin,s top brass, May 7,
Magnetto appeared in good form and fully in charge of
Argentina,s most powerful media conglomerate as it
challenges a government facing its first major political
scandal since it took power four years ago. The main
complaints against K focused on the lack of political
dialogue and his economic policies. The Clarin elite also
suggested their opposition to Chavez. Clarin,s executives
reiterated appreciation for the Ambassador,s helpful actions
to promote the U.S. standard for digital television and gave
an update on the status of the decision. END SUMMARY.


THE POWER OF CLARIN
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2. (SBU) Hector Magnetto, CEO and President of Argentina,s
largest multimedia conglomerate, the Clarin Group, hosted
Ambassador Wayne for lunch May 7, an invitation extended
months before, but delayed due to Magnetto,s ongoing fight
with throat cancer. Magnetto brought with him the two men
most often named to succeed him: Vice President Jose Aranda
and Director of External Relations Jorge Rendo. Also present
were Ricardo Kirschbaum, Editor-in-Chief of the powerful
group,s flagship, the daily newspaper Clarin, and leading
political columnist, Eduardo Van der Kooy. Ambassador Wayne
was accompanied by the DCM, PAO, IO and the Senior FSN Press
Specialist.


3. (SBU) The over-60-year-old newspaper, Clarin, is the
best-selling paper in the country, with a weekly circulation
of 400,000, which swells to 700,000 on Sundays. Two decades
ago, the Clarin Group began diversifying its business both
within and outside the journalism industry, to become a
powerhouse. It owns shares in the two largest provincial
papers, La Voz del Interior (Cordoba) and Los Andes
(Mendoza),in addition to La Razon, the DyN news agency and
Pagina 12. It has printing companies and a controlling share
(in conjunction with rival La Nacion and in partnership with
the government) in the country,s main newsprint firm, Papel
Prensa. It owns three radio stations, including
award-winning Radio Mitre. Clarin also wields important
influence in television, with ownership of open-air Channel
13 and the creation in 1994 of Argentina,s first 24-hour
cable news channel, Todo Noticias. Moreover, it owns the
country,s two largest cable distribution companies:
Multicanal and Cablevision, although the latter awaits final
approval from the government committee responsible for
defending competition. It has internet holdings and
maintains a charitable arm, the Noble Foundation.


4. (SBU) The Clarin Group employs 7800 people. Figures on
its estimated worth are not available publicly, though one
executive ventures that it is worth three to four billion
dollars. Ernestina de Noble, widow of founder Roberto Noble,
and three other shareholders own 82% of the conglomerate and
Goldman Sachs owns 18%. South African media giant Naspers is
reported to be considering whether to acquire the Goldman
Sachs stake.


5. (SBU) Clarin has political agenda-setting powers and is
often described as having the ability to bring down
governments. This is true to the degree that Clarin closely
follows the tide of public opinion, which it continuously
measures through polling firms. It is said that the thing
Kirchner fears most and checks first each morning is
Clarin,s front page. For example, it was only after Clarin
started running front page stories on the Skanska corruption
scandal - four months after it had been appearing in other
papers - that Kirchner spoke in public about the case.

CLARIN NO LONGER DANCES TO KIRCHNER,S TUNE
--------------


6. (C) Magnetto,s ability to communicate is severely

hampered by the surgeries on his throat, which cause him to
speak with the use of a special voice box. Otherise, he
appeared tan and in good form, fully at the helm of the
Clarin Group. He and his team expressed to Ambassador Wayne
their frustration with the government,s refusal to engage in
political dialogue, as demonstrated by the unrest in
Kirchner,s home province, Santa Cruz, where teachers have
been striking. They also complained about the inability to
get an interview with Kirchner, who is famous for harassing
journalists and not giving press conferences. On the
economy, several complaints were made about price and export
control policies, the manipulation of inflation data and
inattention to long-term economic planning. The executives
were baffled by a complete absence of measures that could
increase and/or attract foreign and domestic investment. The
views expressed indicated that despite its often
left-leaning, populist content, Clarin represents
Argentina,s industrial elite and its bottom line is
business.


7. (C) Growing business gripes may explain in part Clarin,s
recent decision to aggressively cover the Skanska corruption
scandal, which it had downplayed for months. For several
years prior, the company had refrained from such
anti-government coverage because it was beholden to Kirchner
for saving it from a post-crisis bankruptcy threat from
foreign creditors, and also because the public was desperate
for political stability. However, a series of political
setbacks in several provinces, along with Clarin,s recovery
to financial health, have now ended Kirchner,s grace period
with the Clarin Group.

CRITICAL OF CHAVEZ
--------------


8. (C) Magnetto raised the question of Venezuelan President
Chavez and asked if the ongoing U.S. business relationship
limited the extent of U.S. concerns, reflecting Clarin,s
official line that Chavez was not a real threat. In a
separate conversation, a deputy to Kirschbaum told us that
the paper is firmly opposed to Chavez, despite the wide range
of opinions it prints. Further to this notion, a television
journalist told us that there were explicit and firm
instructions to downplay coverage of Chavez,s stadium
appearance while President Bush was in Uruguay. The
Ambassador explained that the U.S. was concerned about
Chavez,s anti-democratic policies, his concentration of
power and his destruction of institutions and press freedoms,
but that he posed more of a threat to democracy in other
countries of the region than the U.S.


AMBASSADOR,S LOBBYING DELAYED DECISION ON DIGITAL TV
-------------- --------------


9. (SBU) Rendo confirmed that Ambassador Wayne,s actions to
lobby for the U.S. standard for digital television had
stopped the government from going through with a decision it
had already made to opt for the European standard.
Kirchner,s ties with Spain were cited as the driver of this
preference. Internal disagreement, however, coupled with
Ambassador Wayne,s strong public show in support of the U.S
standard, prompted the government to postpone its decision,
which will not likely be made before presidential elections
in October 2007. Rendo observed that the Japanese have taken
advantage of the opportunity to aggressively position
themselves for more serious consideration. Rendo confirmed
positive results from the trip organized by the Embassy
Commercial Office with the ATSC Forum for key decision makers
to attend the National Association of Broadcasters Expo and
Convention in Las Vegas. The Argentines who attended
returned impressed with the U.S. standard and admitted they
had underestimated its benefits and capabilities. All agreed
that it would be useful for U.S. ATSC partner, South Korea,
to now engage the Argentines more energetically.

THE EMBASSY-CLARIN RELATIONSHIP


10. (C) Like President Kirchner, Clarin,s front page is one
of the first things the U.S. Embassy looks at each morning.
Depending on how an issue is portrayed, a Clarin headline can
trigger negative reactions. For example, when a routine GSP
review was portrayed by Clarin as economic sanction against
Argentina, President Kirchner lashed out against the U.S in
public. On a separate occasion, Clarin published the
Embassy,s letter to the editor in response to an article

that reported false information about Ambassador Wayne.


11. (C) While the Embassy and Clarin can have a prickly
relationship because the paper is not always managed in as
responsible a fashion as we would like, we do have a strong
working relationship. We communicate up and down the line of
management, engaging in daily conversation with Clarin
editors and reporters on the bilateral relationship and
routinely including them in training programs in the U.S.
Aside from placing our op-eds, Clarin appreciates that we
actively support their journalists, professional
development.


12. (SBU) The Ambassador asked about anti-American sentiment
in Argentina, to which Magnetto responded that prevailing
political views derived from two factors: 1) that the U.S is
closely associated with the policies of discredited former
President Menem; and 2) the conflict in Iraq. Magnetto
appreciated that on the contrary, Embassy staff are received
hospitably and warmly by Argentines on a personal basis.
Accordingly, the Ambassador explained Embassy efforts to
enhance its outreach to youth and marginalized populations.
As a result, we are exploring possible areas of cooperation
in education with the Noble Foundation.

COMMENT
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13. (C) Hector Magnetto and his team left the clear
impression that Clarin is no longer satisfied with the
current administration,s management of the country. The
Clarin powerhouse is on the same side as the Embassy in
promoting a government decision in favor of the U.S. HDTV
standard, ATSC, and good business is likely to be the basis
of our dialogue in the future. END COMMENT.

WAYNE