More Easy Pickings in Russian Media

Independent media in Russia is quickly disappearing. Political analysts say it is part of a plan to manage news and information in the run-up to the 2007 parliamentary and 2008 presidential elections. With Russia’s booming ad market, it is just good business for big media companies. Sweden’s Modern Times Group (MTG) is the largest shareholder in CTC Media, Russia’s 4th biggest television operator.

REN TV began broadcasting in 1997, an outgrowth of a television equipment manufacturer founded in 1991 by REN TV president, Irina Lesnevskaya and her son Dmitry Lesnevsky, the station’s general manager. International news and public affairs programs have set REN TV apart from other Russia television channels.

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SanomaWSOY, Axel Springer, Ringier, WAZ and Handelsblatt Expand, Consolidate East European Operations. Lagardere Looks to US Hispanic Market.
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Germany’s Privately-Held Bertelsmann, Now Virtually Debt-Free With 2 Billion Euros In Cash At the Ready
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Uzbekistan: What Color is Your Revolution?
Media lock-down preceeded the civil unrest in Uzbekistan. And it continues. This dictator wants nothing to do with those “colorful revolutions.”

More Belarusian Music on Radio, More Belarusian Models on Billboards
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Severstal, controlled by Alexei Mordashov, purchased the 70% of REN TV owned by United Energy System (UES), Russia’s electricity monopoly for US$100 million, according to a Reuters report. The remaining 30% was sold to RTL by Lesnevskaya and Lesnevsky. Though the amount of the RTL transaction was not disclosed, financial newspaper Kommersant reported the total purchase price at between US$260 and US$300 million on estimated 2005 revenues of $100 million. German news agency dpa reported REN TV’s audience share at 7.5% among 14 to 49 year olds. The final deal was announced July 1st.

Lesnevskaya, quoted by Kommersant, said negotiations had been going on for three years. German newspaper Handelsblatt reported that RTL wanted 49.99% of the channel and offered US$131 million.

“The Russian TV market is one of the most dynamic in the world,” said TNT general manager Roman Petrenko, quoted by Kommersant. “The last four years it has been growing at more than 30 percent a year.”

Bringing the vast RTL resources to bear would substantially influence the Russian TV and media markets. As the major European entertainment program producer and buyer – not to forget its ad sales and management capacities - it could leverage those resources for greater market and advertising share. But as a minority shareholder it would certainly defer to majority interests on the more controversial subject of news and information programs.

"We are glad the deal has been struck, and we see it as a positive step not just for REN-TV's future, but also for that of the Russian media industry as a whole,” said the sellers in a press release.

Despite popularity with Russian TV audiences, REN TV’s journalists have not gained many political friends, particularly not among reining CIS dictators. Uzbek President Islam Karimov expelled a camera crew from Uzbekistan for “biased reports” from Andizan. Last December a REN TV cameraman was arrested in Belarus for filming protests against Belarusian President Alexander Lukashenko. Many Russian journalists had fled TV6 and TWS to REN TV in recent months.

“It would be naïve to assume that the possible financial and structural changes in the television company will not have an effect and will not be tied to the channel’s information policy,” said Eduard Sagalaev, president of National Association of Televsion and Radio Broadcasters, quoted by Kommersant.

Another popular Russian media outlet was sold Friday (July 1) as Moskovskiye Novosti (Moscow News) was sold by exiled tycoon Leonid Nevzlin to Media International Group (MIG). The newspaper is published in Russian and English and the English edition is the oldest continuing English language publication in Russia. MIG is headed by Ukrainian businessman Vadim Rabinovich and confirmed the purchase Sunday (July 3rd). Nevzlin lives in Israel.

“I do not need this newspaper,” said Nevzlin last April as he suspended financial support for the newspaper after a spat with editor Yevgeny Kiselyov. Nevzlin “inherited” control of the oil company Yukos when Mikhail Khodorkovsky was jailed. Khodorkovyky bought Moscow News in 2003 and hired Kiselyov, then general manager of television channel NTV and a leading Russian journalist.

Rabinovich lived in Israel for a period, when he fell out of favor with Ukraine’s former president Leonid Kushma. He’s back in Kiev now and owns, among other media interests, the oldest Russian language newspaper in the United States, Novoe Rushoe Slovo. He has never visited that newspaper’s New York office since the US has denied him a visa over suspicion of running guns from Ukraine to Liberia.

Russia’s TV3 Looking For New Partner - October 16, 2006

TV3, considered Russia’s last independent television channel, has put off a London IPO float scheduled for last May, according to Interfax. Reuters reports the IPO is dead.

TV3 is owned by Independent Network Television Holdings and current shareholders include News Corp and a gaggle of private equity companies like Credit Suisse First Boston and Delta Private Equity. An IPO would allow current partners to cash-out but this is probably a bad year to try to raise the reported $300 million sought. Russia is an extremely hot media market.

TV3 closed last year at a $13 million loss and is about $80 million in debt: small change for big media companies, Russian or otherwise. Gazprom-Media, Prof Media and CTC Media seemed to have begged off. Foreign media companies with interests in Russia, like News Corp and MTG, should be the likely candidates. But the unnamed company spokesperson quoted by Interfax said a “strategic investor” is sought. That always means silent partner with barrels of cash.

Lagardère Expands In Russian Radio – March 14, 2006

When divesting its radio holdings just three years ago Metromedia International could not give away the Russian stations. Times have changed.

Lagardère Active Radio International (LARI) – the division of French media giant Lagardère holding broadcast interests outside France – has acquired the four Russian radio stations MetroMedia International sold to Warburg Pinkus in September 2003.

Lagardère owns substantially all of European Media Group (EMG) which acquired the stations from Warburg’s affiliate RBMH Broadcast Media Holdings. EMG is a partnership with Jorge Polinski, who serves as president of the company. The transaction expands the LARI holdings in Russia to six radio stations and their regional networks. Included in the transaction announced March 10 are Moscow stations Radio 7 and Melodia and St Petersburg stations Melodia and Eldorado. LARI/EMG already owned Europa Plus and Retro FM. Europa Plus was launched in 1990.

Financial terms were not disclosed. Speculation runs from $1.2 million to $20 million. The higher figure was suggested by Sergey Kozheynikov, general director of competitor Russian Media Group, quoted in Kommersant. At the other extreme, the St Petersburg (Russia) Times quotes FINAM investment analyst Igor Veretennikov who added that compared to TV and print media “radio assets are undervalued in Russia. However the situation could change.”

Bertelsmann to Buy Out WAZ Shares in RTL Group - July 4, 2005

Several news agencies quoted a Der Spiegel article Saturday (July 2) that West-Allgemeine Zeitung (WAZ) will exercise its option to sell the 7.4% holding in RTL Group to Bertelsmann. The sale, reported at around €550 million, effectively ends television ownership by WAZ.

Bertelsmann will control 90.4% of RTL Group when the transaction is completed, according to Der Spiegel, within a few weeks. The remaining shares are traded publicly. Bertlesmann has long sought to buy all freely held shares in RTL Group.

Privately held WAZ is Germany’s largest regional publisher and has substantial holding in eastern Europe. It is thought to be interested in one of the financially struggling French daily newspapers.