Twenty years ago, on November 9, 1992, the first issue of a new weekly newspaper, the Budapest Business Journal hit the streets of the capital. Only a little more than a year later, an adventurous American, Stephen O’Connor bought the paper from its founder – those who have been faithful readers of the BBJ for the past 20 years still remember him as the man behind the strong BBJ brand. O’Connor now resides in Moscow with his family and works as an advisor for the government of Tatarstan, but when asked by us, he happily recalled the old days back in the early ’90s when the paper was established. As he puts it, he loved every single sleepless second of those days.
Q: What comes to your mind when you think of Budapest in the early ’90s?
A: Budapest was all the rage in America 20 years ago and I happily confess I was an early victim of the enthusiasm. Media reports documented the Soviet troops leaving through 1991 and foreign capital pouring into Hungary (the majority of which was from Germany and America) and despite other glowing reports here and there about Prague etc, Budapest really was the place to go for real transformative growth and business opportunities due to the country’s heritage of “Goulash Communism” and its’ storied past of heroic revolt against Soviet tanks.
In fact, Hungary received the lion’s share of all foreign investment over all other Eastern European countries combined (including Russia) from 1989 until approximately 1995 – quite impressive for a country with just 10 million people.
After traveling and living abroad as a schoolboy, I had always dreamt of living and working in Europe as an adult and I finally came to a point in my life that I was going to act on it or forever kick myself for not at least giving it shot. Interestingly, although I tried, no company in America would simply hire you and then send you abroad if your stated goal was to work in Europe. Finally, I realized that I had to take matters fully into my own hands.
Q: Why Hungary?
A: Another part of the world almost got me – South America, specifically Suriname, on the northeast corner of the continent, which in the early ’90s had many positive indicators. Plus, my uncle had recently returned from there telling me he saw signs of encouragement. But he also said the same about Budapest.
After reading so much about the changes in Hungary, but still not sure which direction to go in, I happened to see a stirring TV commercial by General Electric early one Sunday morning on the national talk show “Meet The Press”. It was called “The Lights Are Back On In Budapest” and was beautifully shot, showing the lighting of the Chain Bridge while the Hungarian Rhapsody played in the background. The ad was featuring GE’s latest investment in the great Tungsram Lighting Company. It also displayed beautiful Hungarian women dancing the waltz in the pre-redeveloped New York Coffee House.
Well, that was all I really needed to see and I booked a 30-day round trip ticket the next day to Budapest!
Q: How were those first days in Budapest?
A: A few weeks later I landed on a Sunday in mid-September 1992. I was 29 years old and I was on a mission to find a job and an adventure. I had $500, seemingly the only dark suit and tie with black socks in the whole country, and a batch of my CVs highlighting my commercial real estate and former copier sales background. I also had a contact name to one person in the country my uncle happened to know, who said I could stay in her hospitalized mother’s flat for 30 days for $100. I thought that was convenient because that’ s how long my round trip ticket lasted.
Monday morning I took the metro from Moszkva tér down to Pest in my suit (attracting much staring from my new countrymen) and eventually came upon the East-West Business Center. I entered the building and took the elevator to the top floor and proceeded to cold-call every office in the building. I walked into each office trying to pronounce my best Jónapot kívánok and asked to speak to the manager. Amazingly I met almost every one of them, mostly because I spoke English. I handed them my CV and told them I was looking for a job.
Q: How did you end up at the BBJ?
A: I made many new friends that day and was quickly invited to several interviews and even a party at the Fészek Artist Club on Thursday of that week. It was here I met someone who told me about a man who wanted to launch an American-style Business Journal. I instantly knew how valuable something like that could be in Budapest as these same types of local business papers were essential for me when I was in business in the States. I quickly asked to be connected to this fellow who was endeavoring to do this.
The next morning at 8 AM I met a man named Mike Stone for breakfast at the new McDonald’s on Blaha Lujza tér. He was a former lawyer who loved writing and journalism, and had worked his way up to be the former editor of the Orange County California Business Journal. He told me he and his lawyer wife Patrica had recently moved to Budapest for an editorial job at the fledgling Budapest Post and realized the potential for a Business Journal. They pooled their resources – much of it coming out of Patricia’s retirement account if I remember correctly – and founded a company with approximately $70,000.
I immediately joined him in his enthusiasm for it, explaining how helpful these products were to me in the past when I was in the commercial real estate industry and office equipment sales. Stone hired me on the spot (for $300 a month) to be a journalist of all things and write the first commercial real estate article for the first issue of the Budapest Business Journal, which he wanted to bring out as soon as possible.
By that Friday I was working with Stone and his wife and the managing editor, another American, John Callan, who had worked for Mike in California. The BBJ’s first office was in two rooms with three phone lines (which did not work when it rained) out in Buda on Táragató út in an old run-down Soviet style worker’s hotel. I believe that building is now the home of The International Business School of Budapest, which seems fitting.
Other key members early on were Zoltán Bogáthy (now the owner of the Gourmet shops in Budapest called Culinaris) who was our guide to all things in post-communist Budapest and our “Jack Of All Trades”. The two of us bounded pretty quickly along with other great people and new friends like Hungarian-American Frank Marton who was there as our first ad director – along with two young recent graduates from Cornell University who would be our first two staff journalists: Robert Williams and Jill Wiseman. They joined us a few weeks after I arrived and these two especially did a lot of the early heavy editorial lifting, with Mike driving them to produce upwards of five full stories a week each. Alexandra Hendrickson who was a former executive in New York at American Express then joined us. She wrote our finance pieces. And for the political sphere Tibor Vidos contributed a weekly “Parliament Watch”. To top it all off there was the wonderful old lawyer, Dr. Imre Móra, who began a weekly legal column (and whom I later convinced to write a history column instead). Móra would effectively become a surrogate grandfather to me and my wife and first-born daughter through much of our time in Eastern Europe. Many may also remember we published a beautiful book years later of all his compiled articles called “Budapest Then & Now”.
Q: What was your first job at the paper?
A: I had not touched a typewriter since third grade (let alone a computer), but I did my best and turned in my very first article. Stone moved me out of journalism faster than a New York City second and made me the head of the soon to be very popular “The List”. And a few weeks later I became the advertising director when Frank took a job with the famous Ed Bush at AHICO. I was now in the perfect position for my skill set.
All of us in these two small rooms were in an MBA-like situation learning the newspaper business, along with the beauty of the Chinese wall known as the separation of editorial and advertising. We were also learning by osmosis all things business from shareholder rights to the differences between equity and debt. Plus we quickly learned how important it was to bring in revenue as fast as possible or we would not survive another week. We became a band of brothers and sisters and I loved every single sleepless second.
Stone was a brilliant, volatile editor who seemed to be right out of central casting: hard charging, hard drinking, curious and just, mentor-like one minute and drill instructor the next. We all wanted to kill him half the time and loved him at the same time. We were all in it together and we knew we were producing something not seen in this part of the world for more than 75 years.
Investigative journalism mixed with a pro-business mission statement was simply unheard of east of the Elbe River until that moment and the laws of the land did not even support our right to do what we were doing. But we charged forward because there was no one telling us to stop. Everyone basically learned, or tried to learn, each other’s jobs in order that we could survive another day and finally come out with the paper.
Q: Launching a paper is one thing but keeping it afloat is another. How did you do it?
A: The first editions hit the streets on November 9, 1992. I then proceeded to cold call every single business in Budapest with a copy of the first BBJ under my arm door to door to door. In those days no one even knew where anybody was located and when it rained (as I mentioned) the phones went dead because Budapest was still using the Wehrmacht telephone system built in World War II.
There was no choice: I (and the reporters) had to hit the streets. I can confidently say that between 1992 and 1994 I walked up and down every körút and utca in Central Pest and Buda in order to sell advertising. I was literally knocking on ever single door in the city that had lights on if it appeared to have office workers in them resulting in impromptu Unicum shots, heel spurs and, thankfully, ad sales!
Twelve months went by fast and the Stones (with a young son in tow) began to say they wanted to go home and could not commit very much longer to Hungary. Mike said he wanted to either shut the paper down or sell it. Meanwhile, I had fallen in love with the city, its people, the paper, and the entire business – simultaneously becoming the face of the paper across town even selling ads in places like the old Fregatt Bar on Molnár utca late into night, always with the paper and a rate card under my arm.
So, I decided I wanted to own the paper and run it myself. I negotiated to buy the paper for effectively one times cash flow – which was about $275,000. I really was not sure how I was going to do this just yet, but my enthusiasm and belief in the future of the paper and the trajectory of the economy – along with the inability of imagining doing anything else – drove me to “just do it!”
I spent a few weeks going to the heads of some of the biggest Western companies and advertising agencies, asking them to bet on me if I became the publisher with their 1994 budgets. Amazingly many said yes, and even signed advance contracts, some for as high as $30,000 where previously I was only signing contracts averaging $600 to $1,200!
With a few of these advance contracts, I flew home for Christmas and was able to raise $70,000 from a few old buddies and I returned with a cashiers check made out to Stone for that amount – equal to the money they had put in a year previously.
Stone told me he would not agree to sell unless I signed a personal guarantee for the full $275,000. My lawyer friend Adam Dickstein at Arent Fox came to my help and was my advisor and stated if the deal went through I would owe them for his time at 30% on the dollar. If the deal did not go through I would owe them nothing. He told me under no circumstances should I sign that agreement because the risk was too high and no matter what happened “I would be chased around the world for the full amount for the rest of my life.”
I hesitated for about one minute before I signed it, because I believed deep in my gut that through sheer force of will, somehow it was all going to work no matter what.
Q: What was the next phase of development?
A: Knowing that I could not sell everything going forward if I was also going to have to figure out how to manage a paper, I looked high and low for Hungarians who could sell, which at the time was practically impossible. I then found two young people, an American English teacher Doug Wheeler (now COO of internet company Personal in Washington DC) and a spunky Irish woman, Margaret Ann Dowling (now managing director of Marquard media in Hungary), who was working for the Avonemore Milk Company in eastern Hungary at the time, where she said she was “shoveling curds and whey”.
I taught them the basics of selling that I had learned, and let them loose. The three of us then proceeded to sell $970,000 in advertising over the next 12 months.
I would then take $15,000 of cash flow out of the bank each month to pay Stone further down, with a balloon payment at the end of the year. We therefore bought the whole business almost entirely out of cash flow. I even understand that in 1994, with just 5,000 weekly BBJ copies on the street, we outsold in advertising the national daily Népszabadság, which had 700,000 copies across the country per day!
And that is how the BBJ came to be and made it through the ordeal of the early changes after the fall of the wall. And within a year, we launched the Warsaw and Prague Business Journals. But I guess the rest of the story should finally go into a book, as memory of Hungary is rich. It is a place that welcomed me with open arms, giving me the chance to make the place just a little bit better, being a part of something bigger than myself and allowing me to even experience the American dream. Budapest was the best decision of my life.