As Prague’s municipal elections approach, BigBoard (and six much smaller billboard agencies) are pasting over the municipal election posters of Tomas Hudecek, the city’s 35 year-old mayor.




And BigBoard should know...

The reason for BigBoard's blatant assault on the democratic process is the city’s long-overdue efforts to curb the spread of the over-sized billboards that line every major road in the capital.

This hits BigBoard the hardest, as the largest billboard business in the city by far, with 40 per cent of the outdoor advertising market in Prague (according to the association of providers of outdoor advertising, SPVR). Its billboards are not only the most numerous (it has over 12,000 of them): they are the biggest as well, in some cases measuring a massive 80 m2.

The City of Prague wants to limit the size of new billboards to a maximum 6 m2 in an ordinance to come into effect on 1 October 2014.

BigBoard has not limited its actions to obliterating the face of the city’s elected mayor from its billboards. The firm is running its own campaign against the municipality, with many of its own billboards carrying an appeal to voters not to allow the city to continue to steal from them, as it is stealing from BigBoard. The ‘theft’ to which the ‘Okradena Praha’, or ‘Prague Robbed’ campaign alludes is the city’s attempt to limit to size of new billboards.

BigBoard is not only the biggest of its kind on the market: it is also the best connected to the city’s politicians –at least it was until Tomas Hudecek was elected mayor in June 2013. Hudecek is a member of TOP 09, the party that finally ended two decades of control of city hall by the country’s two main political parties, ODS and CSSD, in November 2011.

According to Hudecek, thanks to rental contracts on city land with the City of Prague, the billboard firms have been able to earn almost $100 million US in the last ten years, much of this ending up in the pockets of BigBoard’s owners. Hudecek claims that these contracts have been highly disadvantageous for the city.

According to SPVR, there has only been one case where the city has become a client of BigBoard, at least when it comes to the large format billboards. This was in 2009, when the then Prague city councillor responsible for promoting culture, Milan Richter of ODS, spent $250.000 US on BigBoard to promote the city.

Hudecek seems to have underestimated the Prague-sourced revenue of the billboard firms. According to SPVR, the market is worth $40 million US a year for both large and small formats, with the large formats grabbing three quarters of that and the city making one tenth of that in rental income on its contracts with the billboard firms (see the discussion taking place below between myself and SPVR).

Formally, the negative campaign against Tomas Hudecek is being run by SPVR. This association is clearly a proxy for BigBoard, as a cursory glance over its ruling body demonstrates.

Of the seven members of SPVR’s executive board, four are closely allied to BigBoard Praha a.s.: George Kisugite and Marek Pavlas sit on the firm’s supervisory board; Richard Flimel is deputy board chairman (Flimel is a Slovak lawyer who works for J&T, the financial group that is generally assumed to be the true owner of BigBoard); and Dusan Palcr is a co-owner of J&T.


Dusan Palcr of J&T (and SPVR) arrives in the High Tatras in 2010. He is one of those behind the Okradena Praha billboard campaign.

Undoubtedly, this nasty dispute between BigBoard and Prague’s mayor highlights the unacceptable political influence held by the company. BigBoard's behaviour appears to be an astonishing abuse of market power as well. BigBoard controls 40% of the relevant market (the so-called OOH market in Prague), a level of market concentration that is way above the level regarded as a threat to competition by competition economists. Given BigBoard's evident willingness to use its market power to eliminate the mayor of the capital city, one must assume that it hands out the same treatment to its business competitors.

We must hope that the competition authority will launch an enquiry into BigBoard's behaviour and that Hudecek has the good sense to file a complaint with UOHS forthwith (my company would be delighted to prepare the complaint on his behalf).

But before we celebrate the collapse of those cozy arrangements of the past under which the billboard lobby would offer advertising space to politicians and their business partners in return for special treatment, consider this unpleasant possibility: that TOP 09 might be simply be trying to raise money for its election campaign by squeezing BigBoard and offering its French competitor, JCDecaux, a helping hand.

JCDecaux specialises in the much smaller outdoor ads found at tram stops (hence the Okradena Praha message above). In May this year, it became the sole shareholder in JCDecaux BigBoard, a joint venture between the two firms. It seems that BigBoard has been outmanoeuvred by the French, possibly with Hudecek's help.

We must hope that Tomas Hudecek is acting in good faith. Perhaps he is simply trying to improve the terms of the city's rental contracts with the billboard lobby. But it is hard to imagine that his party boss, Miroslav Kalousek, would ever encourage him to harm the interests of J&T given the long years of warm relations between them.

Unless ANO 2011, which will likely form part of Prague's next municipal government, promises to uphold Hudecek's billboard ordinance, there is only one sure way to test his intentions, and that is to return him and his party to power on 10-11 October.