In many ways 2010 was a watershed for Turkey. A fractious debate over its patchwork constitution ended with a referendum in which prime minister Tayyip Erdogan’s moderate Islamist Justice and Development Party (AK Party) won resounding support for a swathe of constitutional amendments to accelerate democratic ideals. The economy rebounded from the global crisis with GDP growth nudging 10%. Foreign investment was up 5.8% to $8.9bn – the first rise in three years. And the country’s financial and business capital, Istanbul, designated as European Capital of Culture, welcomed 7.5 million visitors.

With reform in the air, money in the banks and [surprisingly good] Turkish wine flowing freely at countless exhibitions, screenings and the reopening of refurbished historical buildings, it was if the country had emerged from a long slumber and taken its rightful place on the European stage.

So it came as a surprise when the government’s first move in 2011 was a raft of changes that appeared to herald a more authoritarian, Islamist shift. Restrictions on the sale and promotion of alcohol have enraged secular Turks – and some Muslims, as the ban on sports sponsorship by alcohol companies may mean the end of Turkey’s top basketball team, Efes Pilsen Spor. Odder still was the ban on alcohol at gallery openings – a move which would have stymied Istanbul’s cultural renaissance had it been made a year earlier – while concerts and clubs are suddenly prevented from serving alcohol to patrons younger than 24. Erdogan, pandering to Turkey’s non-drinking majority ahead of July elections, says all this is to “protect the nation’s youth”.

More worrying, though, is the wave of arrests which many fear signals a clampdown on press freedom in the country. In early March police launched a series of raids, detaining 10 journalists implicated in an alleged plot to overthrow the government. Meanwhile a sale by the beleaguered Dogan, Turkey’s biggest media group, of its newspapers and television stations is on the cards. Last year Erdogan called on his supporters to boycott the once-loyal company’s newspapers and TV channels after they had ratcheted up criticism of some of his government’s policies.

Given the hardball nature of Turkish politics, that in itself would not be news were it not for the fact that in 2009 Dogan found itself facing an unprecedented €2.3bn tax fine. Court cases relating to the fine are still ongoing, but it has prompted anger from the European Commission. “Turkish law does not sufficiently guarantee freedom of expression in line with the European Convention on Human Rights and the European Court of Human Rights,” fumes the enlargement commissioner Štefan Füle, stressing that freedom of the media is a fundamental principle for all modern democracies.

Despite potential buyers such as US private-equity group TPG declaring an interest in Dogan, and reports identifying numerous local and international groups, details of an actual transaction are muddy. “No one has openly said, ‘Sell your assets,’ and the prime minister will certainly say he hasn’t asked for anything of the sort, but that’s the interpretation” says Nuri Çolakoglu, whose 45-year career in the Turkish media involved founding several top TV channels, and who now heads up Dogan’s international arm.

According to him, what started as the sale of just one of Dogan’s newspaper subsidiaries escalated to the group inviting offers for all its media assets.

A spate of other ownership changes and new launches, which have seen the bulk of the Turkish media adopt at least broadly pro-government lines, has prompted allegations of a media putsch. Since December 2007 Turkey’s second biggest media group, Sabah-ATV, has been in the hands of Calik Holding, whose CEO is Erdogan’s son-in-law. According to Haluk Sahin, a communications professor at Istanbul’s Bilgi University and an adviser to the TV8 news and entertainment station, the AK Party has pursued an active strategy to meld the Turkish media. “It is difficult for the media to act independently and the opposition is finding it hard to make its voice heard in the private and state media,” he says, adding that much of the media has become effectively an extension of the party’s PR machine. Indeed many in Turkey’s secular elite note the irony of Erdogan’s government fielding allegations of increased authoritarianism, precisely as the country’s neighbours are throwing off the yoke.

Others are far less despairing. Amberin Zaman, a columnist for several pro-government newspapers, says Turkey is undergoing a process of change that goes beyond ownership of media assets. “Erdogan promised change and has delivered it and despite his authoritarian outbursts, Turkey is a generally a more democratic place,” she explains, pointing out that the AK Party appears certain of being re-elected with a popular majority and that Erdogan has promised to mark his third term in power by drafting Turkey a new constitution. “If, as he claims, it institutionalises democracy on a par with Europe, then that should act as a sufficient check.”

Whatever the motivation behind the potential sale of Dogan’s media assets, no one disagrees that interest in the group is intense, the more so given that an amendment to Turkey’s media law passing through parliament increases the permitted degree of foreign ownership of media companies from 25% to 50%. Reported suitors include local conglomerates as well as international media giants, including News International, RTL, Time Warner and US private-equity groups KKR and TPG. This is hardly surprising given that Dogan’s seven daily newspapers, including Hürriyet and Milliyet, seven free-to-air analogue TV channels, including Kanald D and Star TV, four radio stations and a stable of magazines account for almost 40% of Turkey’s estimated $4bn-plus annual advertising spend – a figure expected to hit $5bn soon on the back of a booming economy.

“The ratio of ad spend to GDP in Turkey is roughly a third of 1% compared to 1.5%-2% in Europe,” says Çolakoglu. Pointing out that there is no other market in Europe the size of Turkey that offers such mind-boggling growth potential, he suggests that the intense interest the Dogan sale has generated may result in more assets changing hands as global players rush to stake out the territory. “In a few years, apart from [the state TV company] TRT, most mainstream Turkish media could be owned by the global media groups,” he adds. Many have already taken the plunge. CNN was the first to arrive back in 1999 in a joint venture with Dogan, followed a year later by CNBC – one of the publishing partners of this magazine – via a joint venture between NBC and Turkey’s (entirely separate) Dogus Group. Bloomberg is involved in local joint ventures, News International has a Turkish-language version of its Fox and Sky channels, and Qatar-based Al Jazeera plans to launch its own Turkish-language operation later this year.

But despite the potential in Turkey, investing in Turkish media is not without risk. “The market is already fragmented and a big sale of Dogan’s assets will fragment it even more,” warns Sinan Göksen, head of equity research at Istanbul brokerage firm Ekspresinvest. “Foreign investors will want to buy assets which can be profitable and most Turkish media assets are not,” he adds, identifying Dogan Group’s Kanal D, Turkey’s most popular TV channel, as one asset which could be very profitable.

Fragmented is certainly a word you could use. Turkey boasts a staggering 1,310 analogue TV channels and close on 370 newspapers. While most are local operations, they include 38 national daily newspapers and 25 analogue national TV stations, of which no fewer than 14 offer rolling news. Even so, few of these big operations are hugely profitable – a legacy of the 1990s,when media presence could be parleyed for political influence, which brought profits in other areas. “Foreign owners will be less willing to lose money,” says Sahin, a fact he suggests may act as a safeguard when it comes to editorial balance.

According to Sahin, it is the better-educated “Western-looking” Turks, who don’t vote for the AK Party, who are the biggest consumers of newspapers and TV news. Targeted by the bulk of advertisers, they are a market media owners will be wary of alienating with any sort of political volte face.

But he warns that Turkey is not immune from the seismic shifts in global media and that those players entering the market will face a major struggle, starting with the long-delayed switch to digital broadcasting – which is likely to have a significant impact on viewing patterns.

Demographics present a major challenge too, with half of Turkey’s 75 million population under 30 years of age. Like their global counterparts Turkish youth increasingly are not avid consumers of newspaper and TV news – they rely on the internet and social media to make sense of the world, he explains.

It’s an observation born out by Facebook-tracking website insidefacebook.com – which ranks Turkey as fourth in the world, with more than 20 million users – and by the fact that of the country’s top 20 websites, only three are specifically news sites, the rest being a potpourri of local shopping sites and global megasites such as Google, YouTube and blogging portals.

This shift, Sahin says, is already affecting newspaper sales and the way that TV is scheduled, which he suggests will have a greater effect on the direction taken by the Turkish media than changes of media ownership. “We’re in uncharted waters, but I don’t think we’ll fall under a more autocratic structure,” he says. “More likely we’ll create something new and interesting.”