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#4 - JRL 7032
Business Week
February 3, 2003
Reality TV in a Russian Boardroom
Was the American chief of station NTV doomed to expulsion?
By Paul Starobin in Moscow

When Moscow-based American financier Boris Jordan took the helm of Russian
independent TV station NTV in the spring of 2001, he was brimming with
His plan: to lead a management buyout of NTV from its new parent, gas titan
Gazprom, and make the feisty but bankrupt network a beacon of financial and
editorial independence. "Gazprom is in the gas business--they don't need a
company, especially a hot potato like NTV," an excited Jordan told
back then. "This is an opportunity in which I can use my skills as a financial
manager, my skills in starting up businesses, and my 10 years of living in
to build an incredibly large media company--one that is built on principles we
accept in the West."

It didn't quite work out that way. Nearly two years later, Jordan, 36, is
out of
a job, abruptly fired by Gazprom on Jan. 17 from his post as chief
executive of
Gazprom-Media over what Gazprom calls differences of strategy. Jordan, in
did restore NTV to profitability, but he could not wean the station away
from its
opaque, state-controlled parent. Gazprom, 38%-owned by the state and with a
government majority on its board, still controls NTV.

The lesson, in part, is that the government of President Vladimir V. Putin,
owns Russia's two other main channels, is reluctant to cede influence over the
airwaves. Putin criticized Jordan's NTV for its relentless coverage of the
takeover of a Moscow theater by Chechen terrorists and the subsequent
Now that Jordan is gone, there is a danger that NTV could become a
mouthpiece for
the Kremlin with parliamentary elections coming this fall and a presidential
election in 2004.

But there's more to Jordan's ouster than lofty free-press issues. This is
also a
business story, a tale of an ambitious dealmaker who overestimated his own
abilities and underestimated his opponents. Jordan, a former Credit Suisse
Boston Corp. banker of Russian descent, advertised himself as a bridge between
high-profile investors in the West and the murky world of politics and
money in

In this case, the bridge collapsed. Jordan, who prides himself on being a
salesman, couldn't pull off a management buyout. He says he assembled
backing for
such a deal from Western investors, including a prominent global media company
which he declined to name. The problem, he said, was that Gazprom CEO
Alexei B.
Miller never spelled out the terms of a transaction.

Jordan also never mastered Gazprom's byzantine corporate politics. He
failed to
tend a key relationship with Alexander Dybal, 36, the ambitious chairman of
Gazprom-Media, the holding company of NTV inside of Gazprom. Dybal, who
last week
was named Jordan's replacement as CEO, says that Jordan was ousted because he
didn't keep Gazprom apprised of key components of his business strategy for
company's media holdings. "Our controversies were about how to manage the
business," not about politics, Dybal says. On Jan. 22, one of Dybal's
Nikolai Senkevich, was named acting director of NTV.

Undoubtedly, things were never going to be easy for Jordan at NTV. He took the
job after Gazprom forced the ouster of NTV founder and fierce Putin critic
Vladimir Gusinsky, now living offshore. Skeptics assumed he would turn NTV
into a
Kremlin puppet. That didn't happen. NTV bravely reported on sensitive topics
including military corruption.

Under Jordan's stewardship, Gazprom-Media's finances improved, too. Last year,
the unit recorded a profit of $495,000 on revenues of $237 million; back in
it lost $35.3 million. At NTV, the core asset of Gazprom-Media, revenues
shot up
from $70 million in 2001 to $127 million last year. "I'm handing down a
that's profitable for the first time in its history," Jordan says. "It's just
that I don't own it." He denies keeping Gazprom in the dark on his strategy
declined to comment on whether political considerations led to his ouster.

There's no need to weep for Jordan, though. He can expect a "considerable" sum
for departing early from his contract with Gazprom, Dybal says. "Sometimes
work out, and sometimes they don't," Jordan says of business deals. His
plans are for a vacation in America--and then back to the high-wire dealmaking
arena in his adopted city.

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