Press freedom in Eastern Europe is getting steadily worse – a decline driven by political pressure, burdensome economic regulations and owner interference in editorial independence. Many outlets have shut down or turned into a husk of their former selves – Index in Hungary, first Vedomosti then VTimes in Russia, in Belarus and most recently Kyiv Post in Ukraine. 

The story plays out time and again. Ex-staffers from a shut-down media decide to keep fighting and launch a new platform. Or perhaps they protest against an unsavoury group joining the ranks of investors. But they always run into the same challenge – money. 

Sometimes reader support is enough to get things started. This was the case with Hungary’s Index; when staff left, they managed to crowdfund close to €1 million to launch Telex. But often reader support takes too long to gather, or is not structured in the right way to prevent, say, a hostile takeover.

More from The Fix: Hungarian startup Telex crowdfunded almost €1 million to launch, now it’s looking to sustainability

Investing to safeguard independence

Pluralis, a new Dutch fund, aims to help media with strong values overcome such challenges. According to Harlan Mandel, a Member of Pluralis Supervisory Board and CEO of Media Development Investment Fund (one of the key investors), Pluralis is an impact investor, meaning they look for both financial and social returns. 

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Pluralis’ logo. Sournce: MDIF

“We target companies that have established a reputation for quality content, but where we believe we can add value to help the company further develop its business,” Mandel told The Fix. He explicitly noted that Pluralis’ investment strategy is non-partisan, meaning that investments are made regardless of targeted publishers’  editorial orientation. 

Pluralis will likely not be a saviour to any and all media in financial distress. Rather it will focus on supporting those entities that both provide social value and have the management capabilities and track record to be sustainable in the long-term. 

“Editorial independence is our first consideration when assessing potential investments – if that condition isn’t met, Pluralis will rule out that company as a possible target. But in itself, editorial independence isn’t enough”, Mandel told The Fix. “We look for strong management teams and companies that already have a track record of financial success or where we see prospects for getting there”.

Geographically, Pluralis does not target particular countries. Any European state where media pluralism is threatened is open for consideration – although too much pressure can make outlets unviable (e.g., if authorities make it impossible to run the business side). That effectively means that countries like Russia and Belarus, and perhaps Hungary, are already too far gone.

“As an investor, we can’t ignore financial realities”, Mandel commented.

More from The Fix: Designed to operate in crisis: the journey of one of Europe’s key media donors

First investments

Although announced on Monday, the new fund has already made its first investments. Pluralis is acquiring a 40% share of Polish media company Gremi Media S.A., a publisher of one of the country’s leading newspapers Rzeczpospolita. The stake in Gremi is the second investment by Pluralis. Earlier this year, MDIF acquired a 34% stake in Petit Press, one of Slovakia’s largest publishers. 

Both of these media are mainstream, but as Mandel noted, for the future, as more investors join Pluralis, other strategies can also be considered which will include investments in niche publications as well. 

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The limited liability company is supported by a group of diverse investors – Media Development Investment Fund (MDIF), King Baudouin Foundation, Tinius Trust, and Mediahuis. Pluralis promises to invest ‘mission-aligned capital and media expertise’ in independent media in need of support. 

According to their press release, its shareholder base incorporates King Baudouin Foundation holding 28.46% of Pluralis, Mediahuis (25.39%), Soros Economic Development Fund (17.41%), Tinius Trust and KIM (6.07%),  Media Development Investment Fund (2.02%), and other investors including  VP Capital (20.64%). Pluralis is currently in negotiation with additional investors to expand and widen its reach. 

More from The Fix: MDIF invests in Slovakia’s Petit Press, bringing closure to press freedom saga

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