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Agora S.A. Group Business Information, Profile, and History

gazeta solidarity luczywo poland

Czerska 8/10
00-732
Warsaw
Poland

Company Perspectives

We endeavor to live by the values which guided us when we founded the company and which continue to be our key tenets--truth, tolerance, respect for human rights and solidarity with the less fortunate. We promote these principles in our media--the newspaper, radio stations and on-line--and we strive to act on them as a company.

History of Agora S.A. Group

Polish media company Agora S.A. Group is one of the true economic success stories to emerge from Eastern Europe since the demise of Communism in the late 1980s. The flagship of the Warsaw-based company is daily newspaper Gazeta Wyborcza (Election Gazette), boasting the highest circulation in Poland. A major part of Gazeta's success has been its use of 20 local editions that combine national news and advertising with local content and ads. Another element of the Gazeta formula is regular daily national supplements dedicated to subjects such as real estate, travel, and automobiles. A weekend women's magazine also is included. In addition, Agora publishes Nowy Dzien (New Day), a national daily in the mold of USA Today, a free national newspaper called Metro, and 14 mass circulation magazines. The Collections division publishes collections of literature and has expanded to include music CDs. The company also has been involved in radio since the mid-1990s and owns about 30 stations, including one superregional news radio station. Agora also runs one of Poland's largest outdoor advertising companies and one of the country's top Internet portals. Agora is eager to add television stations to its portfolio as well. It is a public company, listed on both the Warsaw and London Stock Exchanges.

Origins Dating to 1980s "Solidarity" Movement

A Communist country since the end of World War II, Poland began the process of casting off its form of government in 1980 with the launch of a trade union federation at the Gdansk Shipyards called Solidarnosc, or Solidarity. Led by Lech Walesa, Solidarity became the center of a broad anticommunist movement that included diverse elements such as members of the Catholic Church and the radical left. Although driven underground by the government, Solidarity remained a vital force, preventing the government from launching its own tepid reform program in the late 1980s. Nationwide strikes in 1988 forced open talks with Solidarity, which was legalized in April 1989 and permitted to participate in the upcoming elections it had forced upon the government. As part of the agreement, Solidarity would be permitted to publish its own newspaper for the election campaign. Walesa offered the editorship of the newspaper to Adam Michnik, a philosopher, historian, writer, and longtime leading dissident who was imprisoned for six of the previous 25 years for his activities. To organize and run the newspaper, Michnik turned to Helena Luczywo, editor of one of Poland's most important underground newspapers.

Luczywo's parents, both Jews, fled Poland to the Soviet Union during World War II, avoiding the fate of some three million Polish Jews killed during the Holocaust. Her family returned to Warsaw after the war and was essentially apolitical until 1968 when the Polish government turned anti-Semitic and her parents were fired from their jobs. Luczywo was far from a radical at this point, choosing to get married and have a child. She found work as an English interpreter and translator, and then in 1976 she was hired by a Swedish TV crew interviewing workers persecuted by the Polish government. It was an eye-opening experience for Luczywo, who decided to get involved in the opposition movement. She joined some friends and began publishing the underground newspaper Robotnik (The Worker), which in its very first issue advocated Polish independence. After the government crackdown on Solidarity in 1981 and the beginning of mass arrests she sent her daughter to live with her parents and spent a year leading a furtive life relying on fake identification papers. Luczywo now began publishing a new underground paper, Tygodnik Mazowsze (Mazovia Weekly). In 1986 she was able to secure an exit visa and spent several months in the United States as a fellow at Radcliffe's Bunting Institute. Able to devour the wealth of newspapers and magazines available at the Harvard University library, she became familiar with contemporary Western media. She returned to Poland and edited Tygodnik Mazowsze until Michnik approached her in 1989 about editing the first legally independent newspaper in all of the Soviet bloc of Eastern European countries.

Luczywo brought with her the staff from Tygodnik Mazowsze and established Gazeta Wyborcza, named the Election Gazette because its immediate function was to promote the slate of Solidarity candidates in the upcoming election. Michnik, Luczywo, and her staff set up shop in an empty nursery school, where Michnik used a bathroom as his office and the reporters worked at tables and sat on chairs intended for small children. They even held staff meetings outside in the sandbox. The first issue, which displayed the Solidarity logo, was just eight pages in length and was essentially devoted to profiles promoting the eight Solidarity candidates for office. All 150,000 copies were sold.

Even before the first issue was printed, Michnik and Luczywo knew they wanted to publish a truly independent newspaper. They formed a parent company for the paper called Agora, which in Polish meant a place to exchange views freely. Walesa, on the other hand, believed that Gazeta should be owned by Solidarity. This disagreement escalated further when Gazeta backed Walesa's opponent in the 1990 presidential election. Infuriated, Walesa wanted the Solidarity logo removed from the paper and Michnik fired. In September 1990 Solidarity's National Committee denied Gazeta the right to use its logo and slogan, although Michnik stayed on. He had tendered his resignation but Luczywo and other members of the paper persuaded him to remain.

Finding a Place in the News Economy: 1990s

With the demise of Communism, Gazeta, like all of Poland, struggled to find its way in a new and unfamiliar capitalist system. Newspapers had functioned traditionally as political platforms, but now had to find a way to serve readers in a different manner, and make money. New to the mass market, Agora turned to advice from abroad. At a media conference held in Prague in 1990, New York Times publisher Arthur Sulzberger, Jr., spoke and impressed Luczywo with the concept of a newspaper trying to meet the needs of as many readers as possible. In response to this advice, she pushed Gazeta to print regional editions and she supported the idea of supplements. While Luczywo was proving herself to be a quick learner editorially, she realized she was out of her element when it came to the business side. Fortunately, she had a childhood friend who had become a Citibank executive to turn to: Wanda Rapazcynski.

Like Luczywo's parents, Rapazcynski's parents (the father Jewish, the mother Catholic) fled to the Soviet Union where they became friends. Their daughters became friends as well in postwar Warsaw, but unlike Luczywo, Rapazcynski immigrated to the United States in response to the government's anti-Semitic campaign in 1968, giving up her studies in psychology at the University of Warsaw. She married her Polish émigré boyfriend and had a child while earning a doctorate in psychology at the City University of New York. By 1982 she grew disenchanted with her field and elected to earn an M.B.A. from Yale University. Two years later she went to work at Citibank, ultimately becoming a vice-president and the head of product development. In January 1990 Rapazcynski's work brought her to Poland in search of business opportunities for Citibank. She looked up Luczywo, whom she had only seen twice in the previous 22 years. Within a matter of minutes she volunteered to help with Gazeta. "I felt that I owed a debt," she told Fast Company in a 2000 profile. "These people were here during martial law and communist rule. I wasn't."

For the next two years, Rapazcynski continued to hold down her Citibank job in New York, offering business advice for Agora and Gazeta over the phone, and spending her vacations working in Poland. The strain became too much and in 1992, when her daughter was beginning boarding school, she decided to quit her well-paying job at Citibank and move back to Warsaw for a less than certain career with Agora.

Rapazcynski played a key role in changing the culture at Gazeta, where people were lackadaisical, an attitude bred by decades of Communist rule during which there was no reward for doing good work. But perhaps of even more importance was her job of attracting investors in Gazeta. The owners of the New York Review of Books lent the paper $300,000 for printing supplies in 1990, but finding someone to make a more significant investment in Agora proved difficult. Rapazcynski's daughter wrote 400 letters to U.S. foundations, but no one was willing to take a chance on a country whose future was so uncertain. Some foreign media companies were willing to acquire control of Gazeta, but the paper did not want to give up its hard-earned independence. Finally, Rapazcynski was able in 1993 to convince Cox Enterprises Inc., the Atlanta-based media company, to acquire a 12.5 percent stake in Agora without exercising any editorial influence. The money was used to computerize the newspaper and build a new $21 million printing plant.

The relationship with Cox was beneficial in a number of other ways. Given that Poland's democracy was still in a fragile state, Rapazcynski told the Financial Times, "It was a very comforting thought that if someone tried to arrest us, there would be someone in Washington to scream loudly." The Cox connection also helped Agora to receive $8 million in debt financing from the European Bank for Reconstruction and Development. Moreover, Cox was generous in providing advice. In 1995, having already established Gazeta as the top newspaper in Poland, Agora was ready to diversify and become involved in radio. Cox, owner of a number of U.S. radio stations, helped Agora draw up a business plan and dispatched some radio consultants to Poland. At the time, Polish radio stations were national and offered a mix of music and news. Cox advised Agora to invest in local radio and create focused formats. What Agora learned through market research was that an oldies format would prove popular with Polish listeners between the ages of 25 and 45, the most coveted advertising demographic. The concept proved to be a winning one, and Agora was able to diversify beyond Gazeta. In 1997 Agora bought a 12 percent interest in a pay television station run by Canal Plus of France, but it was sold in 2001 because it was too small a stake to have commercial impact.

Going Public in 1999

Agora hired Credit Suisse First Boston to help with an initial public offering (IPO) of stock to fuel further growth. At the bank's behest Rapazcynski was named Agora's president to provide reassurance to investors, and then the company was prepared for the IPO. Shares were first sold to 1,600 employees for just 24 cents each based on years of service. Given that the general offer price would be 100 times that amount, a large number of employees became instantly wealthy. In addition, Agora set up a charitable trust, which would receive 7.5 percent of the issued shares, to be distributed to Polish charities and benefit the entire country. The 1999 IPO proved highly successful, raising $93 million for Agora, which allowed it to build a new office complex and printing facilities. By the end of the year, Gazeta boasted an average daily circulation of 560,000 and ad sales of $123 million. In addition, its five-year-old radio division, with 13 local stations and one national station, was growing quickly. Ad revenues grew from $2.7 million in 1998 to $7 million in 1999.

Agora looked to develop into a true media empire with the start of the new century. On the print side, Metro, a Gazeta insert first published in 1998, became a separate free newspaper published twice a week in Warsaw in 2001. Two years later it began to be published Monday through Friday, and then in November 2004 it expanded beyond Warsaw and the concept was introduced in nine other cities. In April 2005 another nine cities were added. In 2005 Agora filled out its slate of newspapers with the launch of a national daily called Nowy Dzien (New Day). Agora also moved beyond Gazeta's magazine inserts to establish a full-fledged magazine operation, jumpstarted by the 2002 acquisition of the titles published by Poland's Prnszyñski i S-ka Czasopisma, including Good Housekeeping, Hearth & Home, House Beautiful, Flower and Garden, Bouquets, Beautiful Gardens, Cuisine, Fine Cooking, My Child--The Monthly for Caring Parents, Automotive Magazine, Poster Automotive Magazine, Science, and Life. Later in 2002 Agora acquired several titles from the Motor Media Project, including category leader Motorcycle World as well as yearly Motorcycles of the World and quarterlies Motorcycle World Library and Moped World. Most of the acquired periodicals would be given significant facelifts, and Agora also would launch original titles, such as Avanti, a new women's shopping magazine introduced in 2004, and Logo, a men's quarterly offering advice and shopping tips, which premiered in 2005. Agora also entered the book publishing field in June 2004 with the publication of a 40-volume collection of 20th-century literature, the success of which led to the publication of a 20-volume encyclopedia, travel books, collections of fairy tales, and a collection of classical music CDs.

In other media ventures, Agora launched an Internet portal in 2000, and became involved in outdoor media with the acquisition of AMS, Poland's largest billboard advertising firm. A gaping hole in Agora's holdings remained television, however. The country had only two commercial stations, and it was uncertain when more licenses would be issued. There was a good chance, however, that Agora eventually would add television to its growing list of media assets.

Principal Operating Units

Gazeta Wyborcza; Nowy Dzien; Metro; Collections; Magazines; Outdoor; Radio; Internet.

Principal Competitors

Axel Springer AG; 4Media S.A.; ZPR Group.

Chronology

  • Key Dates
  • 1989 Agora and Gazeta Wyborcza is founded.
  • 1993 Cox Enterprises acquires an interest in the company.
  • 1995 The company moves into radio.
  • 1999 An initial public offering of stock is made.
  • 2002 Prnszyñski i S-ka Czasopisma is acquired, adding several magazine titles.
  • 2004 Agora becomes involved in book publishing.
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