Cablegate: Love for Sale - the Taudry Tale of Turkish Media Ownership

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DE RUEHAK #1371/01 2121436
ZNR UUUUU ZZH
R 301436Z JUL 08
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 7001
INFO RUEHIT/AMCONSUL ISTANBUL 4538
RUEHDA/AMCONSUL ADANA 3116
RUEUITH/ODC ANKARA TU
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEKJCS/SECDEF WASHDC
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UNCLAS SECTION 01 OF 03 ANKARA 001371

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: KPAO PGOV PHUM KDEM TU
SUBJECT: LOVE FOR SALE - THE TAUDRY TALE OF TURKISH MEDIA OWNERSHIP
AND THE AKP

REF: 07 ANKARA 828

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1) (SBU) SUMMARY. With the sale of Sabah Media Group to Calik
Holdings in 2007, critics contended that another portion of the
media had fallen into the pro-government, pro-AKP camp, and that a
dangerously high percentage of the media - possibly over 50% - is
now beholden to them. Given the traditional structure of Turkish
media in which conglomerates with multiple business interests
control most of the media, opinions differ as to what this really
means. Is this a permanent and ominous shift to an Islamist point
of view in the media, or just the new, Islamist business elite
following the example of their secular competitors, using their
media interests to leverage favor with whomever is governing the
country. In the short term, the looming AKP closure case decision
may shed little light on who is right. End Summary.

The Traditional Media Model -
The Few, the Powerful and the Crafty
------------------------------------

2) (SBU) Since the 1980's, when Dogan Holding began to purchase
major media outlets such as Hurriyet, Milliyet and Kanal D TV,
Turkish media has become a controlled asset used by a handful of
large companies. Today, nearly 90% of the media is owned by five or
six companies. The largest concentration is in the Dogan Group
which experts estimate holds 35-40% of the media market, including
newspapers, television, magazines and cable franchises. Although no
direct body of evidence can be cited, it is widely presumed by
communications experts that these conglomerates use their media
holdings to benefit their other business interests. They curry
favor with the government through favorable coverage in their media,
limit editorial criticism of the government, and even restrict their
media from conducting serious investigations into government
corruption. Government in turn favors the companies with tenders,
helpful zoning decisions and contracts that benefit the groups other
businesses. Before the Justice and Development Party (AKP) came to
power in 2002, companies like Dogan, Bilgin and Cukorova used this
cozy relationship with earlier secular governments to grow their
holdings substantially. At least two of those conglomorates -- Al
Bayrak which owns Yeni Safak and Akbulut which owns Zaman -- are
more pro-Islamist and the fortunes of their media companies have
risen in the last decade with the AKP's successes.

Not a Genius Business Model
-----------------------------

3. (SBU) While this cozy relationship benefits company owners and
government officials, the media itself struggles with a lack of
profitability and credibility. Dogan Media employees themselves
such as Hurriyet's Ankara Bureau Chief Enis Bergeroglu freely admit
that, "only Hurriyet and Kanal D show a profit. The rest of Dogan
media outlets are breaking even or losing money." Some even
question market leader Hurriyet's profit. The former editor of
independent Cumhuriyet daily, Ozgen Arac, alleges that, "Hurriyet's
profits come from ad purchases by other Dogan companies, an internal
support system to keep the paper going." The papers avoid having to
develop business models to maintain their viability, but remain
heavily dependent editorially on their owner's demands.

Enter the New Elite
-------------------

4. (SBU) Before AKP, there were a few Islamist-oriented media, such
as Zaman and Yeni Safak. But once the AKP came to power, the model
of large conglomerates owning media groups also began to develop in
companies close to the party. AKP-friendly company owners Ahmet
Calik, Etham Sancak and Zekeriya Karaman all purchased media groups
in recent years. Secularists viewed all these acquisitions with
suspicion, but the purchase of Sabah and its sister TV station ATV
was considered a particularly bitter loss for the traditional,
secularist media. Sabah has one of the largest circulations in the
country and had long been considered a fortress of liberal values,
hosting some of the most illustrious columnists in the liberal
media, including Hasan Cemal, Erdal Safak and Ergun Babahan.

5. (SBU) In addition, critics questioned the terms of the sale.
Calik bought the group in a limited government auction (after the
group had been seized in a bankruptcy case) at an overvalued price.
Even Sabah's own Ombudsman, Yavuz Baydar, confirmed this to us
privately. Calik received funding from a Qatari businessman with
reported ties to Prime Minister Erdogan and received
uncollateralized loans worth USD 750 million from two state banks to

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pay for the purchase. The loans, provided by Halkbank and
Vakifbank, are the largest either bank has ever provided to a single
customer and come at a time when both Turkish and international
markets are facing a severe credit squeeze. The Prime Minister's
son-in-law, who works for the Calik Group, was installed in a
management position at the paper (although his name does not appear
on the paper's masthead). After the sale, secular journalists
warned that the Erdogan government was winning control of the media
through wealthy friends. Contemporary Journalist Association
Chairman Ahmet Akabay admitted the traditional media model described
above has long existed, but added with some alarm that "this appears
to be the first government to try to outright buy the media,
especially the media they don't like."

Is There Fire in All This Smoke?
--------------------------------

6. (SBU) While the structures of the papers purchased by
AKP-friendly companies have not changed significantly and they have
retained their liberal columnists and some top management, media
watchers allege that their editorial slant has changed. Sedat
Ergan, Editor of Dogan's Milliyet daily, argues that "on any given
day, the headlines of Star, Bugun and Sabah are nearly identical."
The papers' main stories are often more critical of government
opposition players like the military or the CHP while the secular
papers downplay the same stories. "New allegations about alleged
criminal activities of the Ergenekon gang usually appear first, and
sometimes only, in these papers," adds liberal Radikal daily's
Ankara Bureau Chief Murat Yetkin.

A Natural Progression or a Revolution?
--------------------------------------

7. (SBU) In the short term, there is some evidence of a shift in
editorial power towards the AKP. Market share is notoriously
difficult to determine in Turkey's media market, making it difficult
to say whether that shift has become a majority of opinion, however.
Taraf Ankara Bureau Chief Ismet Demirdogen and Murat Yetkin -- both
solid liberal professionals who have observed the media for decades
-- comfortably contend that these companies are following the
traditional model. Demirdogen assumes, "once the AKP loses an
election, the owners will turn -- as will their papers -- towards
winning the favor of a new government." Yetkin, whose paper is part
of the Dogan stable, gave an example of the Dogan media's
"obsequious" coverage of the Masut Yilmaz government in the 90's.
Yetkin believes that, "a saturation point was reached and the public
began to see Dogan's coverage of the government as pure propaganda."
Worse, Yilmaz believed his own press, not seeing low turnout at
rallies as a danger sign. When asked how one knows when the
saturation point has been reached, Yetkin replied, "they lose
elections."

8. (SBU) Ozgen Acar of nationalist leftist Cumhuriyet also believes
that this business model is reasonable. However, he contends this
"green capital" takeover of the media is part of the AKP's greater
plan to turn the country into an Islamist model in which the
Islamists never lose power.

The Closure Case Effect
--------------------

9. (SBU) Many in media circles are debating what, if any, effect
the AKP closure case's outcome will have on media ownership. Yavuz
Baydar sees the media climate as very volatile and points out that
the newer "Islamist-oriented" papers, particularly Sabah, have been
losing circulation in recent weeks, while most others have
maintained or even gained readers. Circulation figures show that
these papers have lost nearly 25% circulation in the last several
weeks which, according to Baydar, "is a sign that people are turning
from papers that have the reputation of being owned by the AKP."

10. (SBU) Calik Group's management of Sabah is in stasis with many
important management decisions on hold. Baydar believes that Calik
is waiting to see the case's decision, but admits he has no idea
what Calik may do if the AKP is closed and Erdogan is banned. The
owners of Star, Bugun and Sabah are reportedly pumping money into
their media to keep them afloat. While stalwart traditional
Islamist media like Zaman and Yeni Safak will keep the faith no
matter what, some question whether these newer media owners will
want to keep their media if the AKP is no longer in power and they
cannot benefit from media favoritism in the short term. Enis
Berberoglu argues that, "a major sell off or closure could result in

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great instability in the media environment that could take years to
sort out." He blames this possible danger on the AKP's "foolish"
desire to control the media, and claims it is one reason the Dogan
group has turned against the AKP.

11. (SBU) COMMENT: The media ownership debate is a reflection of
the larger societal shifts happening in Turkey. The great parlor
game of speculation and accusation being played in Ankara now
includes the question: What will the new Islamist elite do if and
when AKP loses power? Whatever happens, though, it is unlikely that
the current media ownership model will shift much, leaving readers
to question who the real masters of their favorite papers are.

WILSON

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