LOVE FOR SALE - THE TAUDRY TALE OF TURKISH MEDIA OWNERSHIP

UNCLAS SECTION 01 OF 03 ANKARA 001371 SIPDIS SENSITIVE E.O. 12958: N/A TAGS: KPAO PGOV PHUM KDEM TU SUBJECT: LOVE FOR SALE - THE TAUDRY TALE OF TURKISH MEDIA OWNERSHIP AND THE AKP REF: 07 ANKARA 828 ANKARA 00001371 001.2 OF 003 1) (SBU) SUMMARY. With the sale of Sabah Media Group to Calik Holdings in 2007, critics contended that another portion of the media had fallen into the pro-government, pro-AKP camp, and that a dangerously high percentage of the media - possibly over 50% - is now beholden to them. Given the traditional structure of Turkish media in which conglomerates with multiple business interests control most of the media, opinions differ as to what this really means. Is this a permanent and ominous shift to an Islamist point of view in the media, or just the new, Islamist business elite following the example of their secular competitors, using their media interests to leverage favor with whomever is governing the country. In the short term, the looming AKP closure case decision may shed little light on who is right. End Summary. The Traditional Media Model - The Few, the Powerful and the Crafty -------------- 2) (SBU) Since the 1980's, when Dogan Holding began to purchase major media outlets such as Hurriyet, Milliyet and Kanal D TV, Turkish media has become a controlled asset used by a handful of large companies. Today, nearly 90% of the media is owned by five or six companies. The largest concentration is in the Dogan Group which experts estimate holds 35-40% of the media market, including newspapers, television, magazines and cable franchises. Although no direct body of evidence can be cited, it is widely presumed by communications experts that these conglomerates use their media holdings to benefit their other business interests. They curry favor with the government through favorable coverage in their media, limit editorial criticism of the government, and even restrict their media from conducting serious investigations into government corruption. Government in turn favors the companies with tenders, helpful zoning decisions and contracts that benefit the groups other businesses. Before the Justice and Development Party (AKP) came to power in 2002, companies like Dogan, Bilgin and Cukorova used this cozy relationship with earlier secular governments to grow their holdings substantially. At least two of those conglomorates -- Al Bayrak which owns Yeni Safak and Akbulut which owns Zaman -- are more pro-Islamist and the fortunes of their media companies have risen in the last decade with the AKP's successes. Not a Genius Business Model -------------- ¶3. (SBU) While this cozy relationship benefits company owners and government officials, the media itself struggles with a lack of profitability and credibility. Dogan Media employees themselves such as Hurriyet's Ankara Bureau Chief Enis Bergeroglu freely admit that, "only Hurriyet and Kanal D show a profit. The rest of Dogan media outlets are breaking even or losing money." Some even question market leader Hurriyet's profit. The former editor of independent Cumhuriyet daily, Ozgen Arac, alleges that, "Hurriyet's profits come from ad purchases by other Dogan companies, an internal support system to keep the paper going." The papers avoid having to develop business models to maintain their viability, but remain heavily dependent editorially on their owner's demands. Enter the New Elite -------------- ¶4. (SBU) Before AKP, there were a few Islamist-oriented media, such as Zaman and Yeni Safak. But once the AKP came to power, the model of large conglomerates owning media groups also began to develop in companies close to the party. AKP-friendly company owners Ahmet Calik, Etham Sancak and Zekeriya Karaman all purchased media groups in recent years. Secularists viewed all these acquisitions with suspicion, but the purchase of Sabah and its sister TV station ATV was considered a particularly bitter loss for the traditional, secularist media. Sabah has one of the largest circulations in the country and had long been considered a fortress of liberal values, hosting some of the most illustrious columnists in the liberal media, including Hasan Cemal, Erdal Safak and Ergun Babahan. ¶5. (SBU) In addition, critics questioned the terms of the sale. Calik bought the group in a limited government auction (after the group had been seized in a bankruptcy case) at an overvalued price. Even Sabah's own Ombudsman, Yavuz Baydar, confirmed this to us privately. Calik received funding from a Qatari businessman with reported ties to Prime Minister Erdogan and received uncollateralized loans worth USD 750 million from two state banks to ANKARA 00001371 002.2 OF 003 pay for the purchase. The loans, provided by Halkbank and Vakifbank, are the largest either bank has ever provided to a single customer and come at a time when both Turkish and international markets are facing a severe credit squeeze. The Prime Minister's son-in-law, who works for the Calik Group, was installed in a management position at the paper (although his name does not appear on the paper's masthead). After the sale, secular journalists warned that the Erdogan government was winning control of the media through wealthy friends. Contemporary Journalist Association Chairman Ahmet Akabay admitted the traditional media model described above has long existed, but added with some alarm that "this appears to be the first government to try to outright buy the media, especially the media they don't like." Is There Fire in All This Smoke? -------------- ¶6. (SBU) While the structures of the papers purchased by AKP-friendly companies have not changed significantly and they have retained their liberal columnists and some top management, media watchers allege that their editorial slant has changed. Sedat Ergan, Editor of Dogan's Milliyet daily, argues that "on any given day, the headlines of Star, Bugun and Sabah are nearly identical." The papers' main stories are often more critical of government opposition players like the military or the CHP while the secular papers downplay the same stories. "New allegations about alleged criminal activities of the Ergenekon gang usually appear first, and sometimes only, in these papers," adds liberal Radikal daily's Ankara Bureau Chief Murat Yetkin. A Natural Progression or a Revolution? -------------- ¶7. (SBU) In the short term, there is some evidence of a shift in editorial power towards the AKP. Market share is notoriously difficult to determine in Turkey's media market, making it difficult to say whether that shift has become a majority of opinion, however. Taraf Ankara Bureau Chief Ismet Demirdogen and Murat Yetkin -- both solid liberal professionals who have observed the media for decades -- comfortably contend that these companies are following the traditional model. Demirdogen assumes, "once the AKP loses an election, the owners will turn -- as will their papers -- towards winning the favor of a new government." Yetkin, whose paper is part of the Dogan stable, gave an example of the Dogan media's "obsequious" coverage of the Masut Yilmaz government in the 90's. Yetkin believes that, "a saturation point was reached and the public began to see Dogan's coverage of the government as pure propaganda." Worse, Yilmaz believed his own press, not seeing low turnout at rallies as a danger sign. When asked how one knows when the saturation point has been reached, Yetkin replied, "they lose elections." ¶8. (SBU) Ozgen Acar of nationalist leftist Cumhuriyet also believes that this business model is reasonable. However, he contends this "green capital" takeover of the media is part of the AKP's greater plan to turn the country into an Islamist model in which the Islamists never lose power. The Closure Case Effect -------------- ¶9. (SBU) Many in media circles are debating what, if any, effect the AKP closure case's outcome will have on media ownership. Yavuz Baydar sees the media climate as very volatile and points out that the newer "Islamist-oriented" papers, particularly Sabah, have been losing circulation in recent weeks, while most others have maintained or even gained readers. Circulation figures show that these papers have lost nearly 25% circulation in the last several weeks which, according to Baydar, "is a sign that people are turning from papers that have the reputation of being owned by the AKP." ¶10. (SBU) Calik Group's management of Sabah is in stasis with many important management decisions on hold. Baydar believes that Calik is waiting to see the case's decision, but admits he has no idea what Calik may do if the AKP is closed and Erdogan is banned. The owners of Star, Bugun and Sabah are reportedly pumping money into their media to keep them afloat. While stalwart traditional Islamist media like Zaman and Yeni Safak will keep the faith no matter what, some question whether these newer media owners will want to keep their media if the AKP is no longer in power and they cannot benefit from media favoritism in the short term. Enis Berberoglu argues that, "a major sell off or closure could result in ANKARA 00001371 003.2 OF 003 great instability in the media environment that could take years to sort out." He blames this possible danger on the AKP's "foolish" desire to control the media, and claims it is one reason the Dogan group has turned against the AKP. ¶11. (SBU) COMMENT: The media ownership debate is a reflection of the larger societal shifts happening in Turkey. The great parlor game of speculation and accusation being played in Ankara now includes the question: What will the new Islamist elite do if and when AKP loses power? Whatever happens, though, it is unlikely that the current media ownership model will shift much, leaving readers to question who the real masters of their favorite papers are. WILSON