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The Macri Era: the market rules

President Mauricio Macri’s arrival to power in 2015 brought about sweeping changes in the Argentinian media landscape. Legislation amended by means of executive orders, the sudden closure of media, high media concentration in the hands of major players and increasing job insecurity are the farthest-reaching consequences of Cambiemos’s (Macri’s political party) administration.

The results of these decisions can be summarized as follows:

  • Grupo Clarín merged with Telecom to create one of the three largest business groups in Argentina and the most powerful in the history of local communications;
  • Over 3,127 media workers were laid off or accepted voluntary retirement in Buenos Aires alone, according to the Buenos Aires Press Trade Union (SIPREBA);
  • State-owned media has lost over half of the audience they had in 2015 and have laid off a record number of employees;
  • 45 journalists were injured by the police while covering news in the streets and 13 others were arrested as a result of repression by security forces;
  • In 2016 and 2017 media outlets that opposed Macri’s policies received less official advertising. This trend changed in 2018, when advertising amounts were reduced, and the arbitrariness in allocations became more moderate.

All these developments reflect the executive branches priorites in the design and implementation of communication policies, the pro-market stance of the Government, the lack of discussion about content production concentration, centralization and circulation, and the exclusion of public interest as a regulatory component.

Executive order-based policies

“Today, the war the Government has waged against journalism is coming to an end.” This statement was made by Chief of Cabinet Marcos Peña in 2015, when he announced Cambiemos’s decision to amend the Law on Services for Audiovisual Communication by means of an executive order to introduce “a twenty-first century public communications policy.” This was one of the first institutional signs of tacit support to large media groups that had lobbied against the enactment and enforcement of the law championed by Cristina Fernández de Kirchner, President Macri’s predecessor.

Also in 2015, the Government established the Ministry of Communications – which was later dissolved in 2017 –, led by Oscar Aguad, a politician from the province of Córdoba who belongs to political party Unión Cívica Radical. His experience in the area was limited. He had been a member of the board of directors of Grupo Clarín’s newspaper La Voz del Interior and had fiercely opposed the Law on Services for Audiovisual Communication (“Broadcasting Law”).

Later, the Executive branch subjected AFSCA and AFTIC – the regulatory bodies in charge of enforcing the Law on Services for Audiovisual Communication and the Law on Telecommunications and ICTs –, to official intervention. Lastly, within his first month in office, the president enacted the Emergency Decree 267/2015, which introduced dramatic changes to the aforementioned laws and restructured the media sector.

The decree also ordered the creation of a new single regulatory body for the telecoms, audiovisual and radio broadcasting sectors, the National Communications Entity (ENACOM), under the political control of the Executive branch. ENACOM loosened restrictions on ownership concentration in radio stations and TV channels by increasing the number of licenses a group could be granted and the level of market penetration; it deregulated the purchase and sale of radio licenses; it removed all ceilings on paid-content TV services; and it rendered cross-media ownership rules (between cable TV operators and telecommunications; and between TV channels and cable TV operators) ineffective. In other words, regulations were relaxed to meet the demands of the most concentrated part of the industry.

In 2016 Grupo Clarín was authorized to purchase Nextel (the fourth largest cell phone operator in Argentina) after the previous administration had forbidden the acquisition. The Government set into motion a process to adapt cellular frequencies so that the company could use them with commercial purposes and to establish time limits for other telecom businesses wishing to enter the paid-content TV market. These measures were carried out single-handedly by means of ENACOM resolutions or executive orders.

When Cablevisión (Grupo Clarín) and Telecom merged in 2018, other market operators (particularly Telefónica and Claro) demanded that the Government created regulations to level the playing field, including permissions to provide paid-content TV services via satellite and to access more cellular frequencies. Moreover, ENACOM and the National Commission for the Defense of Competition (CNDC) oversaw the approval of this transaction, which was one of the largest economic concentration operations in the history of communications in Argentina. The requirements laid down by CNDC included minimum disinvestments in some markets, while ENACOM approved the transaction with no significant observations.

Another important event in the media scenario took place in September 2016, when the Argentinian Congress passed a law on access to public information (Law 27275). The law was a novelty, since until then there had been no rule (except for an executive order enacted in 2003) that guaranteed such a right to all State agencies in all the branches of government. The new law also concerned private organizations funded by the State and required them to be accountable. However, the law was also significantly amended by an executive order issued by Macri, which placed the law enforcement authority under the influence of the executive branch.

Lastly, in December 2018, the Argentinian Congress enacted Law 27498, which introduced new regulations focused on the newsprint market. It rendered ineffective the previous declaration of public interest for newsprint included in previous legislation (Law 26736). It also loosened the conditions for the sale of the only newsprint paper manufacturer in Argentina, Papel Prensa S.A., a company owned by Clarín, La Nación and Argentina's National Government.

 

Reductions in official advertising and less arbitrariness in allocations

In 2018 Cambiemos’s administration spent USD 74.9 million on official advertising. This implied a sharp reduction in spending as compared to 2017, when official advertising amounted to more than twice as much, USD 164 million, a similar figure to that of 2016. With regard to regulation, Argentina’s Upper House had already passed a bill to regulate official advertising in 2016. However, the bill was not supported by the Lower House and thus, fell through.

The bill passed by the Upper House was similar to an internal regulation Macri’s administration had implemented in mid-2016, via a resolution enacted through the Secretariat of Public Communications of the Chief of Cabinet of Ministers. The resolution created a platform of official advertising suppliers and set four rather vague criteria to allocate funds: audience size, message pertinence, geographic area of the media outlet and promotion of a federal system of government and plurality.

By analyzing the enforcement of the aforementioned resolution, it is possible to assess how funds were allocated. The media with the largest audiences received the highest amount of advertising. However, in 2016 and 2017, there were some exceptions to this rule, and media outlets that opposed Macri’s administration, including media outlets owned by Grupo Octubre and Grupo Indalo, were discriminated. In 2018 this situation changed: the cases in which audience levels were not a decisive factor on the allocation of official advertising do not seem to have been related to the editorial lines of the media outlets.

The 2018 list of groups that benefited the most from official advertising is as follows. Grupo Clarín ranks first with USD 14,06 million, seconded by Grupo América with USD 7,76 million, Telefé-Viacom with USD 4,46 million, Grupo Indalo with USD 5,34 million and Grupo La Nacion with USD 3,45 million. This shows that the largest groups in the country received most of the official advertising.

This allocation mechanism excludes community, cooperative and non-profit media outlets. Only a few, such as Tiempo Argentino or Barricada TV, had access to official advertising funds. With regard to advertising allocation, the idea of federalism is faced with the limitations imposed by the market. For instance, in the second half of 2018, more ads were placed in provincial media, even though more money was spent on media outlets located in the city of Buenos Aires. This is the result of a major price variation, which, in turn, is related to market and audience sizes. Media advertising is more affordable in the interior of the country than in the city of Buenos Aires.

State media face a decline in audience levels

The creation of the Federal System of Media and Public Content (SFMyCP), led by Hérnan Lombardi and under the control of the executive branch of government, experienced a process of crisis and decline in State media during Cambiemos’s administration. The SFMyCP includes not only Televisión Pública Argentina (TVPA) and Radio Nacional (a network comprised of over 40 radio stations located across Argentina), but also State-owned TV channels, such as Encuentro, Paka-Paka and DeporTV. The policies implemented in these outlets must be analyzed considering the budgetary/labor, productive and audience aspects.

In terms of budget, the funds allocated to State media were frozen. From 2015 to 2017, Radio Nacional and TVPA faced losses of up to 21% in their budgets in US dollars, according to researcher Alejandro Linares. In 2018 the budget was the same as in 2017, with a year-on-year inflation running at above 40%. In Radio Nacional and in TVPA, the Government established a salary reduction policy and refused to sign any collective bargaining agreement. This cutback also slashed the workforce. In 2017 the Government dismissed 160 workers from content production units in TV channels Encuentro, Paka-Paka and DeporTV. In TVPA and Radio Nacional, voluntary retirement plans were implemented to further reduce the payroll.

The most extreme case was the one of news agency Télam. The Government dismissed over 50% of its workforce (354 employees). However, a court ruling forced Lombardi to take a step back and reinstate laid off workers.

With regard to production, TVPA ceased to produce live content on weekends, whereas Radio Nacional started to rebroadcast the content produced in Buenos Aires through its affiliates across the country (it also includes an AM radio station with local programming). Encuentro, Paka-Paka and DeporTV have decreased their content production to a minimum because of staff cutbacks. Adding to the crisis, in 2015 TVPA lost the license to broadcast local football tournaments, which had been granted by the Argentinian Football Association (AFA).

The economic downsizing also affected State media audience levels. Radio Nacional went from being the fourth most popular AM radio station in the Metropolitan Area of Buenos Aires in 2015 to almost disappearing from ratings after losing 80% of its market share. TVPA lost over 40% of its market share between 2015 and 2018.

The end of the war on journalism?

From the beginning of his administration, President Macri cemented his close ties with key media businesspeople.

By means of Executive Order 267/15, the Government extended the licenses of all radio stations and TV channels for up to 15 years. In addition, it authorized the buying and selling of media. This measure gave rise to operations such as the asset stripping and dismantling of Grupo Veintitrés, the media group that benefited the most from official advertising during the last two Kirchner’s administrations. The most significant example of this type of transactions was the sale of Telefé (owned by Telefónica), Argentina’s main TV station, to VIACOM. President Macri himself held meetings with stakeholders in the United States and Argentina to oversee the company’s terms of sale and operation.

Likewise, the regulatory conditions necessary for Grupo Clarín to expand were released. Again, Macri himself stepped in and met with the group’s managers. This led to several investment announcements.

Grupo América was allowed to resell 4G cellular frequencies, in spite of having failed to abide by the conditions of its contract award in 2014.

In addition, Macri ventured to describe the current situation with an eloquent expression during an interview with newspaper Clarín: “State-owned channels and stations are probably the Government’s fiercer opponents.”

The close ties between the Government and media companies contrast with the crisis faced by the sector, as well as several repression episodes carried out against journalists by security forces during street news coverages. Only in 2017, 45 press workers were injured by the police and 13 others were arrested, according to the Buenos Aires Press Union (SIPREBA).

What’s more, the Government did nothing to mitigate the dismissal of hundreds of workers from various media. Not even in radio stations or TV channels, where it plays a more influential role, did the Government intervene in the face of mass layoffs or delayed salaries payments in installments.

Lastly, during Macri’s administration, Cristóbal López and Fabián De Sousa (owners of Grupo Indalo) and Gerardo Ferreyra and Osvaldo Acosta (owners of Electroingeniería) were imprisoned for alleged corruption crimes committed during the Kirchner’s administrations. Moreover, Sergio Szpolski and Matías Garfunkel, owners of Grupo Veintitrés, were legally prosecuted for tax evasion and asset stripping in their media companies in 2016.

Power is Built Close to the Powerful

Given this context, the Government has made repeated decisions that have benefited large commercial players in the Argentinian information and communication system, to the detriment of a wide range of small- and medium-sized actors, who are becoming the victims of political leaders that disregard their needs and demands.

Critics of this administration are truly scarce in the traditional media market, and only a few can be found in the digital sector. Two cases are plainly evident. One is Horacio Verbitsky, one of the sharpest investigative journalists in the country and a fierce opponent of the current administration. He left the spotlight as a political columnist for newspaper Página 12 after Macri included him in a list of 563 influential people he would like to “send to the Moon in a skyrocket” to transform Argentina. Verbitsky had provoked the President’s anger by disclosing a list of the president’s family members and friends who had benefited from an asset disclosure amnesty scheme Macri had established by the end of 2017.

Another significant case is that of TV host and businessman Roberto Navarro, who was dismissed from radio station Radio 10 and TV station C5N (which belongs to Grupo Indalo) out of fear for his severe criticism of the Government, since the latter pursued the imprisonment of Indalo’s owners. Navarro’s popularity was reflected in audience ratings that always beat Grupo Clarín’s news channel, TN.

These cases illustrate how the Government is progressively taming most commercial media at its own convenience. The agreement between the Government and many media businesspeople, and hence with the companies they own, was reached in line with the changes made in official advertising, regulations and economic measures during the Cambiemos’s administration.

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