US embassy cable - 05BRATISLAVA876

C O N F I D E N T I A L BRATISLAVA 000876 
 
SIPDIS 
 
 
E.O. 12958: DECL: 10/31/2015 
TAGS: ECON, LO, PGOV, PINR 
SUBJECT: FORMER ECON MINISTER RUSKO TO SELL TV SHARES 
 
REF: A. BRATISLAVA 705 
     B. BRATISLAVA 692 
     C. BRATISLAVA 618 
 
Classified By: Ambassador Rodolphe Vallee for reasons 1.4 b and d. 
 
1. (C) Central European Media Enterprises (CME), an American 
Media firm, is finally poised to take control of TV Markiza 
by buying out the shares held by dismissed Economy Minister 
Pavol Rusko.  Rusko, apparently badly in need of "clean" 
cash, finally agreed to sell all his shares -- and thus 
controlling interest -- in market-leading TV Markiza to CME. 
CME official Roby Burke (strictly protect) confirmed to us 
Oct. 28 that Rusko had signed the deal, and that Burke will 
formally sign papers Oct. 31 assuming 80 percent control of 
the station.  Burke said CME will try to issue a public 
statement Nov. 2. 
 
2. (C) CME plans to dismiss or move around Rusko cronies 
within the station, including the General Director and 
Program director.  Rusko's wife, who as a news anchor is the 
real enforcer of Rusko's editorial line within the station, 
will be dismissed but will be given a soft landing with a 
six-month consulting contract for CME.  CME must first obtain 
approval from the Protimonopolny Urad, the Slovak anti-trust 
authority, before making any changes to the management and 
personnel at Markiza.  (Note: Anti-trust approval is separate 
from the process of renewing the station's frequency spectrum 
license.  The Markiza license is valid until January 2007, 
but the owner must apply for renewal in January 2006, and the 
TV, Radio and Retransmission Council should decide on the 
license in March 2006.) 
 
3. (C) Burke added that Rusko appeared a largely beaten man 
during the discussion over the shares sale, a move Rusko had 
long resisted in order to use the station as political 
leverage over fellow politicians.  CME has sought to buy out 
Rusko and his partners for several years, fearing his 
political antics will lead to denial of the license renewal. 
His partners have been eager to sell, but have been barred 
through interlocking agreement from doing so.  This time, 
however, the "negotiations" lasted only five minutes.  From 
the start, CME was willing to offer Rusko a good price to get 
rid of him, so this was never an issue (CME paid Rusko USD 24 
million, of which Rusko should see USD 16 million after 
taxes, according to Burke).  Burke also noted that Rusko had 
been hospitalized recently for chronic high blood pressure. 
 
4. (C) Comment: CME and Rusko have previously reached 
agreement on terms, conditions and price, only to have Rusko 
back away at the last minute.  Markiza's pending frequency 
spectrum license renewal and Rusko's recent dismissal from 
his ministerial post (see reftels) provide sufficient 
motivation for him to follow-through on this latest offer and 
finally "cash out".  The government coalition will be 
thrilled with this news.  CME plans to be minimalist in its 
public remarks on the takeover, saying only that they reached 
a good deal with Rusko and will work to avoid any past 
problems regarding political neutrality of the station.  They 
hope the need for the deal to be approved by the anti-trust 
authority will deter Rusko from lashing out in the media; 
although we expect the media to provoke him.  Opposition SMER 
party leader Robert Fico, whom Rusko courted (the courting 
probably was mutual) after Rusko's dismissal from the 
cabinet, will be dismayed that his real or potential ally no 
longer has its prized media outlet.  We cannot rule out that 
Fico may attack the deal, but CME is confident everything is 
above board and will stand up to scrutiny. 
VALLEE 
 
 
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