Who: The Greek government, Greek broadcasters and their clients
When: 1 July 2016
Law stated as at: 9 August 2016
On 1 July 2016, Greece’s Prime Minister, Alexis Tsipras, unveiled a controversial plan with the launch of a public consultation targeting Free to Air Digital Terrestrial Television (DTT), seeking to establish a trading platform for TV advertising (administered by a third party through a tender), which advertisers and broadcasters will be compelled to use, potentially seeing TV advertising sold in an “auction-like” process in place of traditional advertising agreements.
At present, all advertising deals between networks and their clients in Greece are subject to a 20 per cent tax on advertising, which was introduced during the country’s economic crisis. Under the proposed legislation, a charge of 10 per cent of gross transactions would be payable on top of that to the General Secretariat of Information, a state-owned press and information office. It is estimated this would cost the advertising sector around 28 million euros a year.
In a context of continued financial difficulties, the Greek Government claims that this is Greece’s answer to more transparency in the advertising industry, combatting tax evasion and protecting vulnerable groups such as minors. This comes in addition to Greece’s top administrative Court passing a law last October reducing the number of licences for terrestrial TV channels broadcasting general, free to air content, to four (down from eight), and setting a starting price for new licences at 3 million euros. This was seen by Nikos Pappas, Greece’s Minister of State responsible for the new measures, as the “only financially-viable option to break the “triangle” of corruption which exists between politics, banks and the media”. An international tender for the four 10-year licences was subsequently launched – this was also a commitment made by Alexis Tsipras under the third EU bailout for Greece in 2015.
The news was not received with the same fervour by Greek advertisers who saw this new set of measures as the Government attempting to exert greater state control over the media. Indeed, the Hellenic Advertisers Association, the Hellenic Association of Advertising (Communication Agencies) and the Association of Private TV Stations of National Range have referred to the planned agency as an “unacceptable interference in the affairs of the free press and media industry” which “would hand the government massive control of the TV industry”.
According to the country’s five largest private broadcasters (ANT1, Mega TV, Skai, Alpha and E Channel) the new measures are threatening “media freedom and pluralism” and send “a “very negative message to potential new investors at a time when Greece needs to reassure existing investors and attract new ones”.
The Association of Commercial Television in Europe, which represents the interests of commercial networks in 37 European countries, also expressed “strong concerns” that the planned new agency “threatens several fundamental freedoms and rights protected under the Treaty on the Functioning of the European Union.” It even called on the European Commission to “take swift action to ensure fundamental rights and values are upheld”.
Why this matters:
International TV network groups such as 21st Century Fox and Discovery Communications have a presence in Greece albeit most don’t have free-to-air networks there. It’s not clear at this stage precisely how the new law would impact upon these non-Greek organisations. However, as with any major change or disruption, there is potential for this to affect business in the advertising industry.
Media agencies face the prospect of disputes with broadcasters over the consequences for existing trading agreements if this proposal is adopted. Pricing commitments to advertiser clients may also be affected.