News Corp Exit From Russian Radio Tied Up

Michael Hedges January 22, 2010 Follow on Twitter

A year and a half ago News Corp Premier Rupert Murdoch said he’d be clearing out of Russia and other Eastern European holdings. He’s found it easier said than done.

News Corporation has held, through a Netherlands subsidiary – Multimedia Holdings, a 50% stake in three radio stations in Russia – Nashe Radio, Best FM and Ultra.  Nashe Radio, which has acceptable audience shares in Moscow, was launched in 1998 as a joint venture of Rupert Murdoch and Boris Berezovsky. The other radio stations were folded into the company over several years. In 2008 Berezovsky, a billionaire not popular with Russian Prime Minister Vladmir Putin, off-loaded his stake in the company to a business partner, Georgian-Israeli billionaire Badri Patarkatsishvili.

Patarkatsishvili owned the Imedi television and radio stations in Georgia in which News Corp may or may not have participated financially. When Patarkatsishvili died of a sudden heart attack in London there was a bit of scrambling around to determine exactly who would inherit the Georgian broadcast stations. Shortly there after, Mr. Murdoch said he’d be talking his money out of Russia and Eastern Europe. “The more I read about investments in Russia,” he said to the Financial Times, “the less I like it.”

For the Russian radio stations – primarily Moscow stations – the usual suspects entered into discussions, ProfMedia and AF Media Holdings. Both seem to have backed away. In December, Alfa Group subsidiary A1, may have reached an agreement to buy the stations, according to Kommersant (December 16) for US$16 million. Alfa Group is significant investor in TV broadcaster CTC Media.

That came to a halt, according to Alfa Group sources quoted but not named by Kommersant (January 21), as a British court sifts through a complicated inheritance battle between Patarkatsishvili’s widow and another family member. It seems potential buyers have run for the Seven Hills.

So, here’s the juicy tabloid stuff. Patarkatsishvili’s estate is estimated at nearly £7 billion. He died intestate, no will. Patarkatsishvili’s widow signed an agreement the follow day giving Berezovsky 50% of the businesses. A British court upheld Berezovsky’s claim to that agreement after Patarkatishvili’s widow changed her mind. But there’s more.

A woman then came forward – if that’s the correct term – claiming to have married Patarkatsishvili in 1997, having his offspring and asking for a piece of the pot. All parties have retained very high-powered lawyers. Oh, and there’s also the half-brother or cousin who won control over the Georgian stations. Current court proceedings have effectively halted any transaction involving the Russian radio stations. Mr. Murdoch might love tabloids but this is radioactive.

News Corporation attempted to off-load its outdoor advertising business in Russia to JCDecaux. It never happened. Television stations in Latvia were sold. Bulgarian channel bTV hasn’t found a buyer.

At the end of 2009, News Corp sold a 49% stake in Serbian television channel Fox Televizijato Greek media company Antenna Group (ANT1) for one US dollar and assumption of debts, reported Belgrade newspaper Blic (December 28).

Antenna Group Chairman Minos Kyriakou is the last media baron to make serious money on a media deal. In 2008 he sold Bulgarian TV channel Nova Televizia to Modern Times Group for €620 million.

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