A court blocked accounts of the Ukrainian public broadcaster Suspilne (UA TV) over the 10.6 million euros debt that the company owes to the international channel Euronews, the broadcaster announced on Feb. 28.
The block puts at risk Ukraine’s participation in the Eurovision Song Contest, where Suspilne is a local partner, and may cancel the broadcast of the 2020 Summer Olympics in Ukraine.
Ukrainian broadcaster’s accounts were arrested because of the company’s longstanding debt to Euronews that Suspilne inherited from its predecessor, the National TV Company of Ukraine. Now the public broadcaster calls for the government to cover the debt, or Suspilne will have to suspend its work.
Suspilne organizes the selection of Ukraine’s participant in the Eurovision and sponsors the trip to the contest, which will take place in Rotterdam in May. It selected this year’s participant, a band called Go_A, on Feb. 22, but now the broadcaster says it can’t afford to send the band to the contest.
If Ukraine pulls out of Eurovision 2020, it will be the second consecutive year that it is left out. In 2019, the broadcaster canceled Ukraine’s participation due to a messed-up contest to select the representative.
Minister of Culture Volodymyr Borodiansky promised that together with the finance ministry they will find funding and help Suspilne pay off its debts, but the government and the broadcaster disagree on how it should happen.
Debt to Euronews
The debt that Suspilne inherited from its predecessor originated when the predecessor company stopped paying licensing fees for running Euronews Ukraine.
Back in 2010, the National Television Company of Ukraine signed a six-year contract with Euronews to create the Ukrainian version of the channel, Euronews Ukraine. Suspilne’s CEO Zurab Alasania Alasania said that it violated the law that only allows such contracts to be signed for one year.
Since its launch, Euronews Ukraine proved to be a tool for then-President Viktor Yanukovych’s government to promote its image in Europe. Journalists were spotting differences in Ukrainian and English coverage of the same events – in Ukraine, they were edited to favor Yanukovych.
The cooperation with European broadcaster cost Ukraine a one-time payment of 8.5 million euros and 5.2 million euros in license fees in the subsequent years. In 2013, the funding stopped, and the contract was terminated two years later.
During these two years, Euronews was still charging license fees and a debt accumulated.
In 2017, Euronews Ukraine ceased broadcasting under the decision of the Inter Media Group owned by oligarch Dmytro Firtash who gained control over the media in 2015.
As the successor of the National Television Company, Suspilne inherited its 10.6 million euros debt to Euronews. The broadcaster asked the Ukrainian government to declare the 2010 agreement with Euronews invalid, but it didn’t happen.
When Ukrainian singer Jamala won the Eurovision in 2016, meaning that Ukraine was to host the contest in 2017, Suspilne was required to deposit 15 million euros to the bank in Switzerland to ensure that the next contest will be held. Euronews sued the Ukrainian broadcaster and the money was blocked.
Ukrainian culture minister Borodiansky promised on Feb. 28 that blocked assets will be returned to the budget soon.
Although Suspilne cannot cover the cost of Ukraine’s band Go_A trip to the 2020 Eurovision song contest in Rotterdam, the broadcaster already paid the license fee for participation, meaning that theoretically, the band could go on their own.
No agreement
The culture ministry offered the broadcaster to pay out the debt on its own and promised to compensate it when the money in the Swiss bank is released from arrest.
But there is a trust issue. Alasania says he doesn’t believe that the government will send the money to the broadcaster when the Swiss millions are unblocked. He wants the government to pay off the debt without Suspilne being involved.
Paying the debt would put a dire burden on the broadcaster that is mostly funded by the state and constantly complains of underfunding. In 2020, the public broadcaster was promised Hr 1.7 billion (about 65 million euros) from the state budget, but it doesn’t mean it will get all of it. In 2019, the company received only 57% of the planned funding and in 2018, only 50% of it.
For three months, since December, Suspilne has been withholding wages to its employees, explaining it with “changes in funding arrangements.”
