The last independent broadcasters in Serbia have a new owner, and no regulator approved the change.

On 17 August, Pedro Vargas David of the Portuguese fund Alpac Capital registered himself as director of the companies behind N1, Nova S, Danas, Radar and the Nova portal, filing the applications himself, and the sitting directors were removed the same day. His purchase of the outlets from United Group has not been approved. Luxembourg's audiovisual regulator, ALIA, says its review of the change of control is still open, and the Ministry for Media and Connectivity, whose consent the sale needs, is still waiting on ALIA's opinion.

United Group was under no obligation to give up control before the sale cleared, and agreed to anyway, releasing operational control to Vargas David once the purchase money reached escrow. Buyer and seller settled between them that the handover would come first and the regulatory decision second. Whatever ALIA and the ministry now decide, they are ruling on a situation that already exists.

BFMI set out the risks in this concentration to the European Board for Media Services before it completed and has since written to ALIA and to Luxembourg's Ministry of Media and Connectivity, asking whether Alpac notified the Luxembourg authorities of the change of control at all, and who now carries editorial responsibility across these outlets.

How the structure made it possible

United Group built N1 and Nova S into the largest independent broadcasters in the region while holding them through Luxembourg companies, far from the newsrooms in Belgrade. That arrangement is ordinary in European media finance, and it is what lets a buyer take charge of the outlets in one country while approval for the sale remains open in another.

The affected journalists chime that their independence is intact and that no editor-in-chief has been replaced. The change is one tier up, in the ownership that sets budgets, makes senior appointments, and would be the party to enforce, or ignore, the editorial guarantees in the sale agreement. Those guarantees are worth less than they appear, being promises about how the new owner will behave that are enforceable only through the companies that owner now controls.

Why the buyer draws concern

Alpac took a majority stake in Euronews in 2022. Direkt36, Le Monde and Expresso reported that Hungarian state capital and companies close to the media operation around Viktor Orbán helped finance the purchase. Vargas David has been tied in reporting to Orbán, and Aleksandar Vučić called him a friend late last year. None of this is unlawful, and none of it proves intent. It does describe a familiar method.

The Hungarian government hollowed out its own press over the past decade largely through friendly ownership in place of open censorship, acquiring outlets and letting them drift into line, and the same approach is also spilling across the border. Twenty-seven civil-society organisations across the region opposed the deal for that reason.

Media freedom is a market question, not only a civic one

Media freedom is habitually understood as a matter of speech and civic life, which fixes attention on predictable and recognisable symptoms such as editors being pushed out or SLAPPs. While true, it is pertinent that just as authoritarian actors seek to control media via ‘friendly ownership’ rather than open censorship, we also need to turn to the business censorship now coming to the fore. Thus far, business decisions in the market have warranted less attention for their appearance of routine commercial activity, attracting no more scrutiny than routine commercial activity ever does.

Plurality is a feature of the market and it measures how many independent owners a society's main outlets answer to. It falls as soon as those outlets are concentrated under one mandate, whose own provenance and shape may well be determined by another malign actor. The absence of many mandates is therefore the harm, and it is complete at the point of sale. Whatever journalism does afterwards, however untroubled the newsrooms look, the market has already lost the plurality it should have to be considered a healthy environment for media freedom. An assessment that looks to the newsrooms for signs of trouble is therefore searching where the harm was never going to appear, since it lies in the ownership rather than in the conduct of the journalism.

Can anything be done now that control has already moved

The instinct is to look to the European Media Freedom Act, under which the European Board for Media Services may examine a concentration that affects the internal market and issue an opinion upon it, though an opinion is the limit of what it may do. The Board cannot block a deal, reverse one, or compel a national regulator to do either, and when it examined the capture of Ringier's Hungarian titles it recorded its concerns while the concentration went ahead unaffected. A body equipped to describe the problem is not thereby equipped to halt it, and to treat the Board as the answer in this case would be to invite the same outcome again.

The leverage lies in the consents that have not yet been given. The audiovisual authorisations under which these outlets broadcast cannot lawfully pass to a new owner without Luxembourg's approval, which ALIA confirms is still pending, and the competition authorities of Serbia, Montenegro and Bosnia have not cleared the deal either. A change of control effected before the consent that governs it has been granted does not bind the authority whose consent was required. It leaves that authority with a choice to recognise the transfer or to refuse it until the conditions attached to the licence have been satisfied.

That is the question now before Luxembourg. Operational control has already moved, on the understanding between buyer and seller that the paperwork would follow, and the ministry's response will decide what that manoeuvre was worth. Were it to treat what has been done as a settled fact and grant its consent to match, it would confirm that the sequence works, and that a licence may change hands first and be authorised afterwards. Were it instead to treat the transfer as having pre-empted a decision that was its to make, it could withhold consent until the questions the concentration leaves open have been answered, among them who now holds editorial responsibility and on what terms. In choosing between them, Luxembourg decides whether it governs these licences or simply registers what others have already done with them.

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