RTL Group confirms it's in talks with Hungarian government

Banking

German broadcaster RTL Group confirmed it has been meeting with officials of the Hungarian government in order to discuss the advertisement tax approved in June, daily nol.hu reported yesterday. The tax puts Hungarian RTL Klub into the highest tax bracket by itself and is apparently in retaliation to anti-government coverage.

The German broadcaster did not discuss a report, carried by 444.hu on Monday, that said Cabinet Chief János Lázár was offering relief from the tax if the station agrees to drop its unfavorable coverage and fire its current CEO, Dirk Gerkens.

Oliver Fahlbusch, the vice president for communications of RTL Group, told nol.hu that negotiations have been taking place, and added that it is in Hungary’s best interest that a sensible solution be made to alter the advertising tax without the intervention of the European Union.

RTL Group said that following the approval of the tax, RTL Klub's tax bill grew by approximately €15 mln in 2014 – so that it was basically in line with the previous year's net earnings and pushed the Hungarian TV station into a "structurally loss-making position". RTL Group reiterated that its Hungarian business was the sole media that falls into the highest bracket, which is 40% of total revenue. RTL Klub has turned to the European Court of Justice regarding the matter, but no decision has been made yet.

The government has been openly hostile toward RTL Klub, and the tax was widely seen as a way to silence, or punish a critical voice. Since the tax was levied, RTL Klub has increased its negative coverage of the government, and enjoyed a massive growth in viewership of its news programs.

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