Index.hu: the fort has fallen

Only a handful of journalists remain at Index.hu, Hungary’s largest independent online newspaper. A week ago, most handed in resignations after László Bodolai, chairman of the foundation that owns Index, fired editor-in-chief Szabolcs Dull.

But this is just the end of a long story that started all the way back in 1999 with what has been referred to as a legendary “immaculate conception.” Back then, at the turn of the century, the crew of popular online portal Internetto fell out with their publisher, resigned, and founded Index.hu.

For a while Index was truly independent – until the dotcom boom came to an end and the possibility of an IPO and endless money ceased to exist. The next round of investors was more sensitive to the bottom line. For a time, Kristóf Nobilis was a strawman owner for Zoltán Spéder, a banker with close ties to Fidesz (the current ruling party).

Spéder was a confrontative, activist owner, with had plans for the paper. His rein led to the resignation of Péter Uj, the editor-in-chief and founder of Index, as well as several long-time editors. (Uj then founded 444.hu, one of the remaining independent news sites in the country.)

Later, as the owner of the sales house he tried to get Gergely Brückner fired for writing investigative articles about Spéder’s actions in the banking sector. Spéder managed to turn pro-Fidesz businessmen against him, and after a while he fell out of power. He succeeded in staying out of jail but lost his media and banking empire.

Hold my beer, Ozymandias

A few big changes took place just before Spéder lost his media empire. Businessman and ally of Prime Minister Viktor Orbán (back then, things became more complicated later), Lajos Simicska, was rumoured to have an option on Index. Rather than coming out as the owner, however, he changed the structure of the firms – splitting it between an owner/ publisher role, and a sales house that handled advertising and provided technical services.

Magyar Fejl?dés Alapítvány (Hungarian Development Foundation) became the owner and publisher of Index. The paper was still independent – “we are angry, but we are independent” – wrote Gergely Dudás, editor-in-chief – but Marianna Tóth, a manager strongly associated with Simicska appeared among the board of directors.

The foundation’s owner was a new firm: Nanga Parbat 17 Zrt, owned by László Bodolai. (Later this new firm was sold to Gábor Ziegler, the head of the sales house, and József Oltyán, a politician from the KDNP Christian right party. It later became a property of IndaMedia.) But the Spéder-owned CEMP (now IndaMedia) continued to be the sales house handling the advertising space and providing technical services and assistance to the paper.

This was after Simicska’s fall out with Orbán, the legendary G-day, when the former friend of the prime minister called him a “motherfucker” several times on the record, and turned most of his media channels – Magyar Nemzet, HírTV and Lánchíd Rádió – against Orbán. That helped the cause of Index, the paper was always critical to those in power, and now that aligned with Simicska’s agenda.

But the battle was eventually lost, Orbán became prime minister once again, and Simicska went the way of the dodo. The new owner closed Magyar Nemzet and Lánchíd Rádió; HírTV turned pro-government.

Fight till the death

During the years of political infighting, the newspaper’s status was both blessed and cursed. The journalists at Index could work freely, but pressure on them was mounting. The years of stress and uncertainty took a great toll. That led to the mass resignations a week ago.

There are at least two narratives about what happened next. They mainly differ in who to blame: was Bodolai too stubborn to change his opinion about Dull, or did Dull mis-judge the direness of the situation? Should the staff resign or fight to the last drop of blood?

There are no definitive answers, but the fact remains that in Orbán’s system there is no place for Index. Both narratives agree that the first steps in the intricate dance was Miklós Vaszily’s appearance in Indamedia and the now infamous Gerényi-plan.

Vaszily is a well-known businessman with close ties to the government. He was the previous CEO of MTVA, the state broadcasting organization. Before that he was the CEO of Origo.hu, the biggest competitor of Index which was bought from Magyar Telekom and turned pro-government by its new owners.

The Gerényi-plan was about outsourcing whole departments to make the site nimbler and cheaper to run. The staff considered this an attack and a way to destroy their unity. Bodolai tried to calm down the staff but did not succeed.

They set the freedom barometer – which has been on the site since the Simicska takeover – to “In Danger” and published an open letter about the situation.

Bodolai, a seasoned media lawyer, a long-time defender of Index and the chairman of Magyar Fejl?dés Alapítvány, and Szabolcs Dull, editor-in-chief, went to war against each other. Dull protected the unity of the staff, Bodolai wanted to win time and run the site as long as it could be run.

The choice was made between the fast death by mass resignations and fighting till the end. After a month of fruitless – and leaked out – debates Bodolai fired Dull and ended the story of Index. The staff asked Bodolai to reinstate the editor-in-chief, and after he refused to do so, they resigned.

Show me the money

There are at least three different ways of how “the internet” spread in Eastern European countries. In Poland, the killer app was e-commerce; the Czech market centred on a local search engine and its other services. In Hungary, it was free – both as a commodity and as in speech. The big players in online news were the VC-funded Index and the Magyar Telekom-funded Origo. Print newspapers were slow to respond to the arrival of the internet.

There was no considerable success in launching a non-ad-funded newspaper. There were experiments; sites funded by smaller donations do exist. But the only significant game on the Hungarian language internet is the ad-funded model.

The big question after the fall of Index is if there is a way to launch a truly independent, subscription-based paper. The most recent effort was unsuccessful – Gergely Dudás, a former editor-in-chief of Index, launched a crowdfunding campaign for a newspaper with strong focus on politics, but support failed to materialize. HVG, a weekly print newspaper with a decent online presence, has a subscription-based subsite that does okay. Some smaller sites receive donations from the readers.

In the end, Orbán wins

Vaszily or not, it looked like the implosion at Index surprised the pro-government propaganda media. They failed to cover it, there were no narratives, and now, after all of that happening, they only managed to blame the former socialist prime minister, Ferenc Gyurcsány for everything.

If this were a pre-planned execution, there would be narratives ready. What’s more, this comes at a bad time for Orbán. He managed to get the post-COVID-19 EU funding unlinked from the respect of rule of law. Orbán has firm allies in the German industrial companies and their lobbyists, so if the German automotive industry is happy in Hungary, it is hard to imagine firmer actions against his government.

Yet, it would be difficult to argue that Hungary is a country with free press and respect for European values, when the largest newspaper’s whole staff quits because of government meddling. We have more questions than answers now. Two things are sure, Orbán can sleep untroubled, and the Hungarian free press suffered a great blow.

(Disclosure: I worked at as a journalist at Origo.hu from 2007 to 2013, and at as the technology editor at VS.hu from 2013 to 2016.)