Bozhkov(b)TV swallows BGN 8m after scandalous contract with BST, the oligarch's firms rake in profits

Within less than four years, BGN 8m have flown into the cashbox of the allegedly independent station bTV thanks to a scandalous contract with the state-owned company Bulgarian Sports Totalisator (BST) for buying airtime and broadcasting the Sports Toto programme. A journalistic inquiry of Blitz found out that the abovementioned contract was signed in September 2016 but without a tender, as loophole in the law - namely in the Public Procurement Act (PPA) - was used which presents a possibility for contractors not to apply PPA provisions when concluding contracts with the providers of media services.  

From the subject of the abovementioned contract other worrying circumstances transpire, namely that it is not BST which dictates the terms of the contract but bTV Media Group. Proof of that is the fact that Article 1 (11) makes the state-owned enterprise dependent on the TV station for years ahead. This is backed by an explicit clause limiting the right of BST to negotiate and sign contracts with the key competitor of bTV, Nova Broadcasting Group, for as long as six months   

Record high prices for advertising

What makes great impression in the contract concluded in the autumn of 2016 are the sky-high prices for advertising. During the first year, the sum totals BGN 825,000 while during the second year it amounts to BGN 1,200,000. Along with that, BST is obliged to pay 4.8% of its revenue exceeding BGN 1,800,000 up to BGN 2,700,000 a week, and 6% for the revenue of over BGN 2,700,001.

So, in a totally non-transparent way and in disregard of the principles of fair competition, generous cash flows started pouring into bTV instead of supporting sports federations on the brink of financial collapse.

The appearance of Florian Skala

Nine months after the new CEO of bTV Media Group, Florian Skala, appeared on the scene, it turned out that in the middle of the implementation of the scandalous contract with BST, the TV station wants to ensure for itself even more favourable terms, although without the necessary substantial reasons. By virtue of Annex 1, all of a sudden much more lucrative terms are offered to bTV. As a result, its revenue is increased by over 10%. For example - for BST revenue of BGN 2,700,000 under the initial contract, the television should receive weekly BGN 43,000 from the variable component. With Annex 1, signed by Florian Skala, bTV already receives BGN 48,000 per week from the variable component.

However, apparently this is not enough for the gluttonous media. Apart from the more favourable terms, Skala insists on making corrections in the antedate payments for the period March-June 2017, and his demand is satisfied. What follows is a second annex with a scandalous addition stating that BST cannot apply the “unforeseen circumstances” clause and claim damages.

This brazen behaviour results in Annex 3, most probably signed under duress. This additional agreement enables BST to withdraw the notice of contract termination owing to failure to comply with the contract on the part of bTV Media Group. 

Parallel with that, BST agrees that the private TV will broadcast other gambling games, which was strictly prohibited in the initial variant of the contract. Make a guess what games are meant? Naturally, the gambling games of Vasil Bozhkov. This fact emerges against the backdrop of Blitz's disclosure concerning the friendly ties between Vasil Bozhkov and Florian Skala. Information was made available to the media about their meetings and the subsequent visits to the office of a party leader in connection with the amendments to the Gambling Act discussed later. Tsvetomir Naydenov revealed in an interview that Bozhkov took Skala to the posh resort of Courchevel. Be as it may, let's go back to the contract with BST.   

Further on, BST takes the next disadvantageous actions, which, however, are completely to the benefit of bTV. Article 3 (1) explicitly states that upon expiration of its two-year term the CONTRACT IS TERMINATED! But this apparently does not impede BST and bTV to breach this contract clause.

With annexes 4, 5, 6 and 7, hastily and against all transparency rules (about which the “television of all viewpoints” keeps trumpeting non-stop) the two parties extend the contract by three years and three months, i.e. until December 2021. On top of that, BST commits itself to pay higher interest rate to bTV Media Group during the extended term of the contract. During the first year, the increased interest rate on the variable component jumps from 4.8% to 6%, in the second - from 6% to 8% and in the third - from 8% to 11%. In practice, the contract between BST and bTV makes the Bulgarian sport a hostage for as long as the date of its expiration in 2021. 

“Just for the information of the 'independent and objective' journalists of the allegedly independent and objective bTV, the funds under the abovementioned contract with BST account for one-third of the media's wage expenditures. At least so say the figures in the official financial statements of bTV Media Group. Maybe this is the reason why they turn a blind eye on the BGN 21m which the firms of Vasil Bozhkov pocketed by virtue of the contract concluded with BST on including his gambling games in the bTV programme. There is information that he tried to take control over the entire database of BST,” Blitz notes.

The media raises the following questions:

-        Will this criminal contract be terminated without delay and will the money be redirected to the Bulgarian National Television?
·        Will bTV and BST be held accountable for syphoning off over BGN 8,000,000 from public funds?

·        Will the “independent and objective” journalists of bTV ask their superiors about their ties with indicted persons?

·        Will the media outlets run by the indicted publishers Ivo Prokopiev, Ognyan Donev and their friend Sasho Donchev finally become objective, and will they write about the scandalous contract between bTV and BST?

·        Will the NGOs headed by the Anti-Corruption Fund, which strike a pose of fighters against corruption, pay heed to this high-profile scandal and probe into the revenues of bTV or will they hush it up again proving their loyalty to the behind-the-scenes television which is so generous when it comes to giving them the floor?  

It depends on the answers to these questions whether the abovementioned media outlets will shake off their dependencies or, owing to them, Bulgarian journalism will continue to plunge even below the 111th position in the World Press Freedom Index, Blitz says.

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