Greece Proposal to Create State Agency for TV Ad Sales Draws Opposition

Greece - H 2015
AP Images

Greece - H 2015

A centralized system and a 10 percent levy would go against "fundamental freedoms and rights," say networks and other critics.

Greece has in recent years drawn international media attention with its handling of an economic and debt crisis and a related showdown with the European Union. But in recent weeks, the government has drawn the attention, and ire, of the local media industry after in July unveiling plans to establish a state-owned agency designed to sell TV advertising electronically.

Critics have compared the initiative to other European governments' attempts to crack down on media freedom, including in Hungary and Poland. Greek and international TV companies have spoken out against the planned move, arguing that it threatens the future outlook of the industry.

They criticized the centralization, which would require anyone wanting to buy ad time on a free-to-air TV network to go through the state system and register every transaction, ad orders and time availability. Any transaction outside the system would be prohibited.

All the transactions would be open to the government, with the agency handling the electronic system obliged to deliver reports to it on a daily, weekly or monthly basis, including such details as prices, discounts, time slots, channels, advertisers and more. Plus, the government is planning a 10 percent levy on the cost of every transaction, which would come on top of an existing 20 percent tax on all ad deals between networks and their clients.

The overall Greek ad market is estimated to be worth $625 million annually (€570 million), with TV accounting for $220 million (€200 million) of that.

The planned agency would constitute an "unacceptable state interference" in media the Hellenic Advertisers Association, the Hellenic Association of Advertising – Communication Agencies and the Association of Private TV Stations of National Range said. "This state intervention would hand the government massive control of the TV industry. It represents an unacceptable interference in the affairs of the free press and media industry."

U.S. TV networks groups, from Time Warner to 21st Century Fox and Discovery Communications, which are among those with a presence in the country, haven't commented on the situation. Observers said most don't have free-to-air networks there, meaning it's not clear what impact the planned law would have for them. "But any major changes, conflicts and disruptions can potentially affect business," said one analyst.

Greek minister of State Nikos Pappas has said the left-wing government of prime minister Alexis Tsipras sees the new system as a way to ensure greater transparency in advertising, limit tax evasion and protect minors. But the Greek media and ad organizations say: "The new law would send a very negative message to existing and 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 its "strong concerns" about the planned new agency and system. "While the purported justification of this measure is the improvement of transparency in advertising markets, commercial broadcasters are concerned that such an intervention may come at the expense of several fundamental freedoms and rights protected under the Treaty on the Functioning of the European Union," it said.

It even called on the EU to get active in the matter. "Removing the freedom to freely conclude advertising agreements in such a manner sets out serious questions. Commercial [networks] call on the European Commission to take swift action to ensure fundamental rights and values are upheld," it said.

The public consultation on the law was set to end early this week, but the government didn't immediately comment on how it went. One source said various opposing comments were submitted in the process.