The Russia Journal
October 19-25, 2001
Russia’s media melee enters new round
By GABOR SZABO
Ownership of two of Russia’s largest television networks is up for grabs as controversy once again swirls around NTV and TV6.
Two groups – including the Alfa-Group and a consortium of former Gazprom-Media chief Alfred Kokh, current NTV head Boris Jordan and an as yet unnamed foreign investor – are already jockeying for a chance to buy the assets of Gazprom-Media, which includes controlling stakes in NTV and roughly 20 one-time members of the Media-MOST empire.
Meanwhile, enigmatic tycoon Boris Berezovsky has launched an attempt to buy a further stake in TV6, increasing his control over the company and fending off an attempt by LUKoil to close the channel.
The battle for NTV – which was seized by the state-owned Gazprom in April after a nearly two-year dispute with its exiled founder, Vladimir Gusinsky – was re-ignited late last week when Kokh resigned as head of Gazprom-Media, which had been given the shares in the Media-MOST companies.
Kokh’s surprise exit came after he failed to persuade newly appointed Gazprom CEO Alexei Miller to sell Gazprom-Media to the consortium he put together with Jordan, Kokh said in an interview published in Wednesday’s Kommersant.
"Three months ago, we made Gazprom a proposal to buy the entire media resource," Kokh said. "At first it was well received, but then everything got tied up in the bureaucratic machinery. And then we said, ‘Guys, if you don’t want to sell to us, then hold a tender and just give us the right to participate.’ Again there was some kind of incomprehensible red tape, and in the end it was only after my resignation that Mr. Miller literally forced himself to say that the media resource will be sold, though he didn’t say how or when."
A spokesman for NTV, who asked to remain anonymous, confirmed that Jordan is interested in participating in what Kokh is already terming a "management buyout." Jordan took the director’s chair at NTV in April, after a controversial extraordinary shareholders’ meeting ousted the management loyal to Gusinsky.
Media-MOST, which still maintains a minority stake in NTV and the other Gazprom-Media holdings, has not been included in discussions on any possible sale and is not aware of who the possible buyers might be, said Media-MOST spokesman Dmitry Ostalsky.
"The thief does not usually consult the victim when considering how to dispose of what he’s stolen," Ostalsky said.
But now that the sale plans are out in the open, Kokh and company are likely to face stiff competition, primarily from Russia’s newest budding media empire, controlled by Mikhail Fridman’s and Pyotr Aven’s Alfa-Group. The group, which already includes large stakes in STS, Nizhny Novgo-rod’s Nika-TV, St. Petersburg’s Channel 6 and Ukraine’s New Channel, will likely try to make good on any opportunity to take control of NTV, STS General Director Roman Petrenko told the Russia Journal.
"[Gazprom-Media’s assets are] so important and it would be strange, given their obvious interests, if Alfa-Group were to stay on the sidelines of the deal of the century," Petrenko said.
Meanwhile, Berezovsky has offered $10 million for LUKoil’s 15 percent stake in TV6, which would give Russia’s arguably most powerful businessman – who lives in self-imposed exile – nearly complete control over the country’s only privately owned nationwide television network, which has taken second place in viewer ratings since absorbing much of NTV’s former news team.
LUKoil subsidiary LUKoil-Garant is seeking to liquidate TV6, citing poor performance, although TV6 officials say it will turn a profit this year. In an open letter to LUKoil CEO Vagit Alekperov, published in Kommersant, Berezovsky alluded to an indirect offer Alekperov made via a Kremlin official to sell the stake to Berezovsky for $7 million to $8 million and, in doing so, end the dispute.
"I accept your proposal," Berezovsky wrote. "Moreover, I believe that you have underestimated the value of TV6. I offer you $10 million for your stake. Any decision you take will bring a resolution, because it will answer the question: Is politics or business at the heart of your desire to liquidate TV6."
Officials at TV6, while still hoping for a reversal of an earlier court decision in favor of LUKoil, welcomed Berezovsky’s offer as possibly the best way to resolve the issue.
"We are happy to see any proposal that would allow us to resolve this conflict and get on with our work," said TV6 spokeswoman Tatyana Blinova. "This liquidation attempt, which is based on problems left by previous management, has made our lives incredibly difficult."
But just hours after Berezovsky’s offer made front-page news, TV6 was hit by another lawsuit, this time from Television News Services, which had provided programming on a contract basis to TV6 in years past. When Berezovsky bought into TV6 in 1999, the contract with TNS was severed and a $3 million debt to the company was turned into a "veksel," or bill of exchange. But on Wednesday, TNS sued TV6 to recover the money, breaking the initial veksel agreement.
"Evidently, LUKoil has decided to use this as another lever to apply pressure," Blinova said. "But we will resolve this issue as well."
Whoever ends up controlling the channels, Russian viewers are not likely to see major changes, even as concerns editorial policy, Petrenko said. Both channels benefit from professional managers and respected news teams and both maintain a relatively independent line, though TV6 is more critical of the government than NTV. And while Berezovsky wrote that, "for me, the value of TV6 has to do with more than money," Alfa-Group, for one, would not be likely to demand major changes.
"The era of oligarchs using the media as mouthpieces is coming to an end," Petrenko said. "It’s going out of fashion. Instead, they’re looking at the media as businessmen. They’re seeing increasing capitalization in the sector and realizing that it’s a good place to make a real profit."
(Natasha Terex contributed to this report.)