CITIC Gains Majority Stake in Medea Media Agency, Gaining Control Over Czech Media Landscape

On April 18, reports emerged that, earlier that week, China’s state-owned CITIC Group acquired a majority stake in the Czech Republic’s largest domestic media agency, Médea, through its Czech investing arm, Rainbow Wisdom. With its most recent acquisition, CITIC increased its existing 30% equity in Media to 57%. CITIC acquired its initial stake in Medea from Chinese conglomerate CEFC China Energy, which divested from the Czech entity after significant controversy (and scrutiny) following the high-profile rise and fall of the company and its founder. This newest equity position offers CITIC more control over the company than its existing owner, Czech businessman, Jaromir Soukoup.

The majority stake grants the company considerable influence over the Czech Republic’s media landscape, given that influential role Médea has carved out in the commissioning and allocation of advertising revenue for many Czech news outlets. 

According to the Czech investigative publication Hlídací, Medea manages a CZK 3 billion media budget (approximately $119 million), which they are reporting is now expected to be divided up among news agencies based on their relationship and news coverage of matters related to China. According to an anonymous source close to the deal cited by the publication, news outlets that are more “accommodating” of Chinese interests will be allocated higher advertising revenues.

CITIC’s equity increase was reportedly brokered by the Czech Republic’s former Defense Minister and the Czech Social Democratic Party’s (CSSD) election manager, Jaroslav Tvrdik, as well as, current advisor to President Milos Zeman, Martin Nejedly. The deal also reportedly has support from the country’s Interior Minister, Jan Hamacek, a pro-China figure in the Czech government. Per reports, CITIC’s majority control over Medea is expected to benefit the incumbent CSSD party’s efforts to retain power and influence in the Czech Republic, once President Zeman’s term ends.

The European Union remains concerned about predatory Chinese investment and acquisition of critical, but distressed, European assets amid the coronavirus pandemic. Countries including Italy, France, Germany, and Spain have taken steps to strengthen their foreign investment screening mechanisms to avoid such scenarios. Notably, approval for the Medea equity increase was issued by the Czech republic’s anti-monopoly authority in 2019, however, it seems that involved parties found the coronavirus pandemic to be the opportune time to finalize the deal, which places CITIC and CSSD in discreet, powerful positions in the country’s media landscape.