Al Jazeera looking for foothold in the Balkans

Lord Mayor of Sarajevo says the city plans to sell the broadcaster Studio 99 to Al Jazeera for ?163,000

Al Jazeera is in talks to buy the television and radio station Studio 99, based in Sarajevo, in its bid to set up a regional news centre for the Balkans, informed sources say. Studio 99, a private broadcaster founded in 1992, has been struggling financially in recent years and was bought by the city of Sarajevo late last year with the intention of turning it into a public broadcaster.

But last week Dr Alija Behmen, the mayor of Sarajevo, said the city planned to sell the broadcaster to Al Jazeera for €163,000 (Dh808,397), about the price it paid for it. "Al Jazeera will establish a regional office in Sarajevo which is expected to lead to the creation of new jobs," Dr Behmen said, according to Balkan Insight. Officials at Al Jazeera have declined to comment on the deal, with those close to it saying the final details have yet to be worked out.

The move would mark another step in Al Jazeera's rapid expansion in recent years into new media and markets. Last July, Al Jazeera English finally broke into the cable market of a major US city after years of trying, signing a deal with MHz in Washington, DC. Then in November, Al Jazeera became the MENA region's primary sports broadcaster when it bought Arab Radio and Television's sports content, including the regional rights to this summer's FIFA World Cup. In February, it entered the retail market with its first internationally distributed DVDs.

Studio 99 was founded just as Bosnia was descending into the war that lasted until 1995, and developed a reputation for coverage that promoted ethnic tolerance during the war. It was formerly an affiliate of Radio Free Europe-Radio Liberty (RFE-RL), the US government-backed broadcasting network aimed at providing coverage to countries in eastern Europe, central Europe and the Middle East that restrict the flow of information, or have underdeveloped media infrastructures.

But after the war, international funding dried up and the station struggled to find new sources. Sarajevo government members confirmed the sale was going ahead in a recent report on RFE-RL's Balkan Service, but it raised questions about the city's right to sell Studio 99 because of a pending lawsuit against the director of its parent company PEP. The suit alleges that after the war Adil Kulenovic, the founder of PEP, transferred the ownership of Studio 99 to PEP without the consent of the station's co-founders and owners, RFE-RL reported.

It also challenges the sale of Studio 99 to the city of Sarajevo, claiming that Mr Kulenovic did not have the authority to make the sale. Zoran Ilic, a co-founder of Studio 99 who is involved in the lawsuit against Mr Kulenovic, told RFE-RL: "City authorities have [no right to negotiate] with Al-Jazeera. The founders of Studio 99, and Adil Kulenovic as the managing director of PEP, should talk with Al-Jazeera."

Neither Studio 99 officials nor Sarajevo city government officials could be reached for comment. Al Jazeera declined to comment on the lawsuit.