Post-Soviet Media Law & Policy Newsletter

Issue 33-34     Benjamin N. Cardozo School of Law     November, 1996 

RUSSIA

I.  Lazutkin assesses state of Russian TV.
II.  Russian state-run TV head reduced to Moscow media chief.
III.  Anatoly Lysenko: Enough Love, Give Us Some Money.
IV.  Channel 2 Director to leave network.
V.  VGTRK head Sagalayev on cash crisis, reform plans.
VI.  Yelstin Proclamation on VGTRK.
VII.  NTV and Its Universities.
VIII.  Duma again recommends ORT renationalization.
IX.  State broadcasting may be cut because of lack of funds.
X.  Russian Networks Race for the Sky.
XI.  Far East radio broadcasting under threat.
XII.  New satellite TV channel STS to launch in December.
XIII.  Government repays debt arrears to media sector.
XIV.  Gazprom buys 20% stake in Top Daily.



I.  Lazutkin assesses state of Russian TV.

    Valentin Lazutkin, chairman of Russia’s Federal Television and Radio Broadcasting Service (FSTR), has given an interview to the Moscow newspaper ‘Nezavisimaya Gazeta’ in which he outlined plans to set up a State Inspectorate for TV and Radio Broadcasting.  He also commented on the growth of commercial TV in Russia and on the country’s plans for inter-regional TV.  Following are excerpts from the interview with Lazutkin by Antonina Kryukova, headlined “Valentin Lazutkin on Russian television’s old and new problems,” as published by ‘Nezavisimaya Gazeta’; subheadings added editorially:
    For 25 years now the professional life of Valentin Lazutkin (born in 1945), chairman of the Federal Television and Radio Broadcasting Service of Russia (FSTR), has been linked with the mass media.  He graduated from the school of economics of Moscow State University and went on to graduate studies at the Academy of Social Sciences under the CPSU Central Committee; a candidate of philosophy.  At the beginning of 1985 he was appointed head of the USSR Gosteleradio’s [State Television and Radio Committee] international service, and in 1987 deputy committee head.  In December 1993 a presidential edict appointed him deputy chairman of the Russian FSTR (just formed).  Since March 1995 he has been head of this service.
[Kryukova]     Valentin Valentinovich, what are your agency’s functions?
[Lazutkin]     Unlike the USSR Gosteleradio, the federal service of Russia does not run television and radio but rather regulates and coordinates the life of the industry.  The industry today consists of three all-Russia television companies and five radio stations, the Voice of Russia foreign broadcasting service, 92 regional state television and radio companies, a number of enterprises providing technical and programming services for broadcasting, the State Archives of Television and Radio Programmes, and two sectoral institutes.  There are currently 452 commercial and 43 municipal television companies, as well as 206 commercial and 16 municipal radio stations.  Several hundred companies have been granted broadcasting licences but are not yet on the air.  Potentially, the national frequency availability permits the organization of 2,000 more new television and radio broadcasters.
[Q]     What are the regulatory mechanisms?
[A]     They include legal, engineering and technical, economic, personnel and sociological aspects.  At the government’s request, we prepare draft laws and normative documents—sectoral and intersectoral.  We are responsible for current and long-term financing, and the uninterrupted distribution of television and  radio programmes across the country.  We organize festivals and competitions.  We coordinate targeted thematic broadcasting programmes, while not ordering anyone what to show or say.
[Q]     How many employees does the FSTR have?
[A]     For the whole of our huge country—173 staff members, with low salaries and without even the ability to go on a business trip to Nizhniy Novgorod, not to mention Siberia or the Far East.  Two days ago the FSTR was given a warning that the heating would be turned off—and it was.  We will survive, but broadcasting capacities are being shut down (budget nonpayments!).  This year, unless we come to our senses, we could lose state television and radio!
[Q]     How would you characterize the current state of our television?
[A]     On 1st October we marked 65 years since the beginning of television broadcasting in the USSR, but to this day 8,316 population centres in Russia (1.75m people!) do not have all-Russia television coverage at all, and 5.36m people living in 18,684 cities, towns and villages can receive only one television programme!
    Communications industry data show that in 40 regions the all-Russia television coverage indicator is below the average for Russia and below the so-called social norms.
    Radio broadcasting also has its problems: Because of old relay transmitters and unstable power supplies, coverage and “assured reception”—that is, the ability to receive state radio stations’ broadcasts—are declining; the wired (most affordable) radio broadcasting network is dying.
[Q]     What is being done to solve these problems?
[A]     The previous comprehensive programme of television and radio development, adopted by all-union directive agencies in 1984, was mostly completed, and it is also obsolete in some aspects.  The FSTR, jointly with the Ministry of Communications, has just worked out a new federal targeted programme for the development of television and radio broadcasting in the Russian Federation.  Now we will defend it, lobby for it and battle for financing.
Growth of commercial TV
[Q]     At the end of 1990 the first private commercial channel—2x2 TV—appeared on TV; now it has become a trend.  What do you think of it?
[A]     Generally speaking, this is the direction the world is moving in.  And in our country it has all happened relatively fast.  This has pluses and minuses.  The classic definition of private television is that it is an enterprise for extracting profit from television broadcasting.  And this is the way many Russian companies of this category operate.  But there also is another trend, and we see in this area an increasing desire to educate, promote culture and meet the diverse interests of viewers.  In general, however, the appearance of a large number of non-state companies is the surest guarantee that society will no longer go back to television monsters and the monopoly on the “truth.”  . . .
Plans for inter-regional TV
[Q]     Many people believe that the trouble with our television is the lack of a national concept.
[A]     In your opinion, national television must meet, as a minimum, the following requirements: ensure maximum possible coverage of the population; politically—live the life of the regions, and be actively interested in the outside world and Russia’s place in the community of nations and peoples; creatively—be a collector and source of culture and the arts.  If this is the case, our country does not yet have today a “brand-name” national TV.  There are declarations and intentions.  Both [Sergey] Blagovolin [director-general of Russian Public TV, ORT] and [Eduard] Sagalayev [head of the All-Russia State TV and Radio Company, VGTRK] have ideas.  ORT is the only fully-fledged channel received on the entire territory of the country .  That is why it has to serve as a powerful centre of public interest .  The RTR [Russian TV and Radio] network coverage is much weaker, plus it has to share with regional companies.
    How should VGTRK develop, in my opinion?  I told Oleg Poptsov [former VGTRK chairman] more than once: Your fortune, your strength and your future lie in creating a Russian national television network; we have 89 regions, and all regional state companies operate on Channel 2 (evening airtime from 1700 to 2000).  As far back as 1966 this network was built up as a regional one – a considerable share of republic and oblast budgets went into this.  Shared regional networks exist in many countries—France and Germany for instance.  This is very important, because such a network brings together and maintains the unity of the country, and has its own “value scale.”  VGTRK decided that it would be too troublesome, uninteresting, not “rating-worthy” finally, to take the regional television network road. . . .  A pity! How many opportunities were lost! But we will still have inter-regional television—the Russian television network called TV-Region.
[Q]     Could you tell us about this in more detail?
[A]     This television network should be and will be based on the programmes of local television studios.  We are tentatively calling it the Russian Lands Television Channel.  At its core will be news programmes—based not on special correspondents’ information but told through the eyes of local journalists, whose first responsibility is to their local communities.  It is envisaged that it will operate around the clock, similar in structure to CNN, that is, a television network where centralized and local material go hand in hand.

‘Nezavisimaya Gazeta,’ Moscow, October 5, 1996

II.  Russian state-run TV head reduced to Moscow media chief.

By Tamara Ivanova

    Anatoly Lysenko, the Director-general of the Russian state-run TV channel (VGTRK), is leaving his post and will head the newly-created telecommunications and media committee at the Moscow government.
    Lysenko, who together with Oleg Poptsov, was the founding father of the Russian TV channel, told TASS on Tuesday that the decision to quit his post “was not an easy one and has taken several months.”
    Poptsov was dismissed by Boris Yeltsin early this year for what the President said was “worst light” coverage of events, especially of the war in Chechnya.  Eduard Sagalayev replaced him as the VGTRK chairman.
    Lysenko, who is one of the 15 academicians of the Russian TV academy, said he had started two businesses, including the Russian TV, from nothing over the past ten years.  The third one was inevitable, according to him.
    He said the new job was attractive to him because Moscow has “a unique information field.”  Lysenko plans to improve the Moscow TV channel so that it is “worthy of Moscow.”

ITAR-TASS, Moscow, November 12, 1996

III.  Anatoly Lysenko: Enough Love, Give Us Some Money.

By Yuri Bogomolov

    The departure of Lysenko from ORT and his appointment to the government is occasion enough to include this August interview by Yuri Bogomolov.
[Q]     There are numerous rumors circulating about potential personnel shifts and dismissals.  When this sort of thing happens after a political setback, it’s more or less understandable.  But now?
[Anatoly Lysenko]     Some housecleaning takes place after a great success, too.  And no less bloodily than after a failure.  It has to do with the redistribution of spheres of influence.  A new team has arrived which has to build a network of connections in the TV structures.  On the other hand, every channel has its own cover in the power structure.
[Q]     What do you mean by cover?
[A]     Sometimes it’s good relations that allow you to get hold of exclusive information.  Sometimes it’s merely exclusive access to people.
[Q]     State TV’s poverty makes it especially tempting for commercial structures. . . .
[A]     You can’t say that they’re making a full-scale assault on our company.  They’re only moving somewhat unwillingly into territory the state has abandoned.
[Q]     Did you feel the hot breath of government paternalism during the election campaign?
[A]     We felt the hot breath of administrative supervision, but it did not express itself in material or financial aid.  Today we are saying, “We’ve had enough love, give us some money.”  It’s funny, but I recall the Soviet days on TV with nostalgia.  That was an era when no one talked money.
[Q]     Those are all your own reasons.  Does the government have any of its own?
[A]     No.  You might argue about budget appropriation.  But they tell me, “You can beg and plead all you want, but we’re not going to give you more than 30 percent.  So now I’ll line up my channel with that.  I’ll broadcast this many hours, not that many.  Yes, we’re in the same situation as the other TV companies, but they can talk about privatization, about attracting Western capital.  And we’re categorically prohibited from doing that.
[Q]     And how do you get out of the mess anyway?
[A]     We make some money thanks to commercials.  But we mainly live on the sale of airtime.  Sometimes we do it publicly, but mostly very privately.  It’s no secret that a lot of our broadcasts do not serve a cultural function.  They’re plain advertising.  I already shudder to hear the word “sponsor.”  Although I am extremely grateful to most of them.  I am even convinced that the future well-being of television is in the hands of sponsors and not advertisers.  It’s a different matter that financial benefactors in the rest of the world don’t require you to jump through hoops like our sponsor does.  They want us to make it perfect and, on top of that, go to bed with them—as good as.  That creates a climate of seduction, if you will.  This affects you less if you’ve worked in TV a long time.  Maybe it’s insulting, but older people are more cowardly in their attitude to taking money.  They have a powerful built—in braking mechanism—fear.  The young ones don’t have such reservations.
[Q]     Which private businesses are the most active in moving into territory abandoned by the government?  VideoInternational?
[A]     I wouldn’t say VideoInternational.  It’s a vigorous agency.  I love the guys who work there.  They’re talented.  But I understand that an advertising agency is interested in getting you under their thumb.  That’s their cash cow.  They milk the cow, and we get some too.  And maybe some of the cash settles elsewhere too.  In principle, I see state television as being commercial-free.  At least one channel ought to be free of advertising.  The people working there may have to settle for 30 or 40 percent less pay, but not many times less.
[Q]     And if they gave you your freedom?
[A]     No problem.  We would find a master at once.  But TV would change.
[Q]     There is one independent station already: NTV.  The niche is occupied.
[A]     True.  That’s also a problem.  Not only for us, but for NTV too.  Commercial TV can’t afford the luxury of stopping in its development.  Frankly speaking it’s doomed to expansion.  Although right now space is limited—I mean the technological side.  Today no one is dying to build a new television tower.  Everyone is trying to hang their broadcasters on the old tower.  The most significant result of the current ferment in TV is a redistribution of channels.  I think that they’re going to take away Channel 4 from us.
[Q]     People from commercial TV have moved to your company.  How productive is that, in your view?
[A]     Some of these businessmen come with ambitious notions; others are envoys from interested commercial organizations.  So what’s the biggest difficulty?  Right now, State TV lives at the juncture of budget money and commercial money.  The methods of expenditure of these two types of money are different.  The accounting is different.  The responsibility is different.  Guys who aren’t used to working with budget items don’t always slow down in the turns.  And we’ve already hit our toes on that more than once.
[Q]     When he quit, Poptsov, the former head of the State TV Company, threw out a phrase that I didn’t attach much significance to at the time.  He said that he had been a victim of a financial clan deal.  Perhaps today’s sensational appointments will be caused by a new financial clan mutation?
[A]     As regards Poptsov, I don’t think so.  He was probably a victim of a political deal.  We had a great many arguments about this.  He ran the company as a politician.  I figure that we’re merely bureaucrats.  As for the growing role of private business, that’s a fact.  The commercial structures appearing in the social arena aren’t trying to rip off $ 50,000 and get out—they’re trying to provide a political future for themselves through television.

Moscow News, August 8, 1996

IV.  Channel 2 Director to leave network.

    Anatoly Lysenko, who has served as general director of RTR since the company was founded in 1990, is leaving to head the Moscow city government’s Committee on Telecommunications and the Mass Media, ITAR-TASS reported on 12 November.  Moscow Mayor Yurii Luzhkov announced new financial breaks for the media last week.  Lysenko co-founded RTR with Oleg Poptsov, who served as the network’s chairman until President Yeltsin fired him in February.
    Lysenko has been around a long time.  He was also one of the founders of the association of broadcasters known as MART, first created at the November 1991 landmark Novgorod conference of independent TV stations.  He has been behind MART ever since, even though it’s atrophied; but MART still controls the night satellite time on RTR’s beams, even though it has reported to be billions in arrears in paying for this privilege.

Omri Daily Digest, No.  219, Part I, November 12, 1996

V.  VGTRK head Sagalayev on cash crisis, reform plans.

    The ‘Rossiyskaya Gazeta’ newspaper has published a lengthy summary of a memorandum on the situation in the All-Russia State TV and Radio Broadcasting Company (VGTRK) written by the organization’s head, Eduard Sagalayev, in which he outlines the difficulties facing VGTRK and argues that the lack of proper policy has brought it to the brink of disaster.  The memorandum points out, among other things, that VGTRK’s distribution system has outlived its working life, and the company owes some 225bn roubles to Communications Ministry enterprises.  It says there are fewer resources for producing programmes, no proper financial audits have been carried out in the six years since VGTRK was set up, and the management structure, wage system and number of staff are all acting as constraints on future development.  The newspaper then reviews a number of proposals Sagalayev makes for VGTRK’s future, the main one being that it be transformed into a holding company while remaining under the control of state shareholders.  Following is the text of the article published by `Rossiyskaya Gazeta,’ headlined “God of commerce or muse of TV? Who will emerge the winner on the Russian channel in a financial impasse?”; ellipses as published; subheadings added editorially:
    There is a spectre stalking the capital—the spectre of the future flotation of the last of the state television channels—Russian channel two, currently headed by Eduard Sagalayev.  You can imagine the howls of the patriots and nationalists, who at the moment are totally absorbed by the state of the president’s health, when the memorandum “On the Situation of the All-Russia State TV and Radio Broadcasting Company (VGTRK)” and the proposals to save it submitted by Sagalayev to the government, become public! “The last bastion of statehood! We will not let the `moneybags’ get their hands on something which rightly belongs to the people!” (Articles reflecting such heated sentiments have already started appearing in the patriotic press).
    Let’s investigate.  The memorandum indeed exists, and there will indeed be a government meeting devoted to discussing it.  It depicts with all seriousness—and is thus not intended for readers at large (some editorial offices evidently received it because one of Sagalayev’s “well-wishers” specially organized an information leak in the hope of raising a furore well before the government had scrutinized the document)—the real state of affairs in the only company still run by the state.  Let us quote from its preamble:
    “The VGTRK is passing through a critical phase of its development. . . .  The accumulated problems of growth and the lack of a well-considered policy in the field of state television and radio have brought the company to the brink of disaster.  The VGTRK needs urgent and resolute reform; it needs to be given real assistance as one of the main guarantors of Russia’s information security.
Programme distribution
    “The potential audience of the second all-Russia channel totals 200m viewers, while Radio Rossii has a potential audience of 150m listeners.  Nine Gorizont satellite systems, around 300,000 km of land lines and more than 6,000 television and radio transmitters are involved in distributing VGTRK programmes.  But the entire distribution network is past the end of its working life and totally worn out, while the retransmitters are on their last legs.  The VGTRK’ s debts to Communications Ministry enterprises total 225bn roubles. . . .
Technical infrastructure and facilities
    “These consist primarily of five complexes of buildings in Moscow and St Petersburg and the Space Communications Centre at Klin (a former ABM [anti-ballistic missile] military unit).  Four of these five buildings are more than 50 years old, and one of them—35 Shabolovka Street—is the decrepit steel and concrete shell of an unfinished military facility transferred to the VGTRK under a conversion programme.
    “There is a presidential edict from 6th October 1995 opening up the possibility of attracting investment with a view to developing the facilities at Klin and 35 Shabolovka Street.  But because of their condition, years of trying to find investors have proved fruitless.
    “The only impressive thing about the VGTRK’s production infrastructure is the area covered by its studios and editing and broadcasting control rooms.  Two-thirds of the technical facilities are obsolete and worn-out (the Shabolovka Street television centre, for example, last had a refit in 1981-1983).  In modern terms, the only thing the VGTRK really possesses is the equipment used to get the `Vesti’ news programme on the air (the `Newsroom’).
    “The regional correspondents’ network is in a lamentable state, with most departments and local offices short of transport and editing and video equipment, and no money to use satellite communications for the high-speed transfer of information from the regions.
    “On top of the debts for Communications Ministry services, there is a growing shortage of resources to produce and make programmes and feature films.  A strategic and, unfortunately, irreparable mistake was made in the VGTRK’s long-term programme.  In 1993 a decision was made to build an ultramodern radio complex whose total cost eventually reached 38.5m dollars.  Contracts were concluded with the French construction firm Diram and the Dutch [German] technical company Siemens, and advance payments of 26.1m dollars have already been made, but construction is still at the groundwork stage, which will be completed we know not when . . . .
    “In the six years that the VGTRK has been in existence, no financial checks have been conducted here.  Numerous violations were identified as a result of a check which the Finance Ministry Audit Administration conducted in May-June 1996 at my request.  The team calculated that we were liable for financial penalties of 50,248.1m roubles, whereas the company’s accounts have only enough money to cover the next pay day.
    “As a result of the chronic shortage and interruptions in budget funding (in the first six months of 1996, 43 per cent of prescribed budget funds were allocated), the company is keeping afloat only because of revenue from advertising, sponsorship and commercial activity.  Only at a stretch can state radio and television be described as such, since the company has to base a considerable proportion of its activity on the laws of a commercial organization.
Personnel
    “Among the shackles binding the company hand and foot are the management structure, the wage system and the number of personnel.  The average wage of creative and production personnel is of the order of 400,000 roubles a month, which is 10-15 times below the real market rate in Moscow for TV and radio staff.  The number of staff (there are more than 4,500 people in the company) is twice or three times the sensible personnel requirement.  Quality of work is traded for quantity of workers.  The absence of a contract system spawns stagnation and laxness in creative teams, while the poverty-level salary rates encourage people to look for ways to obtain additional income illegally. . . .
    “It is five and a half months since I was appointed VGTRK chairman. . . .  One thing of which I am absolutely certain—despite the gloomy diagnosis of the state of the VGTRK—is the potential latent in it.  The company can and must be the main pillar of state informational and cultural policy.  The company is capable of overcoming the syndrome of the commercialization and tragic distancing of television from the real life of viewers at large, primarily those in the Russian provinces.  The term `people’s television,’ which I set forth as the objective and focus of my professional and public work, is translated by us into a many-voiced dialogue between the people and the authorities, between the authorities and the people, between all strata of society themselves. . . .  For this TV needs to be strong, dynamic and modern.”
Sagalayev’s proposals for the future
    This is followed by proposals, the main one of which is a change in the VGTRK’s structure.  The company must be converted into a holding company which would include a privatized Radio Rossii; the RTR-Teleset company, which is involved in a long-term project for digital satellite broadcasting; and, eventually, a number of other enterprises, with the state holding a controlling block of shares.  As Sagalayev sees it, the Shabolovka Street and Klin facilities, which the VGTRK cannot afford, should be transferred as the company’s contribution to the joint-stock companies.
    Strictly speaking, this was the proposal which sparked the rumours of a future VGTRK flotation along the lines of the Ostankino-ORT [Russian Public TV] model, where formally the state has a controlling block of shares but actually everything is run by financial structures.
    But Sagalayev’s scheme is fundamentally different.  The VGTRK would remain a state company and not give away a single square inch of its property.  But around it you would create daughter enterprises—sort of satellite towns in the shape of joint-stock companies where the state would own a controlling block of shares.  One such daughter enterprise will soon be created on the basis of St Petersburg Channel 5, which is today, like the VGTRK, eking out a pitiful existence.  A draft edict has already been formulated under which 76 per cent of the shares in Channel 5’s incorporation capital would be in the hands of state shareholders (33 per cent each for the VGTRK and RIA Novosti and 10 per cent for the collective of the St Petersburg-Channel 5 company).  The remaining 24 per cent would be shared by the private-sector shareholders—according to some reports, Uneximbank, Soyuzkontrakt and others.  This, in Sagalayev’s view, will make it possible not only to keep on Channel 5 the educational “Russian Universities” channel, which the VGTRK lost after the Russian president transferred the whole of Channel 4 to NTV, but also to inject new blood and provide new impetus for development.  St Petersburg TV could get compensation for its interests in the form of guaranteed airtime on Channel 2.
    Eduard Sagalayev’s other proposals—on the need for full budget funding for state television and radio and the introduction of a special tax on television (a so-called subscriber tax)—are hardly feasible at this time, although, in Sagalayev’s view, unless the state meets its financial obligations to the VGTRK “it will not be able to rely fully on reciprocal responsibility on the part of the state television and radio company.  The god of commerce, not the muses, will reign here.”
Rumours about Sagalayev’s future
    It is not known whether the current VGTRK leader will persuade the government to adopt his scheme.  But there are rumours going around again that his days in this post are numbered.  It is known that immediately after the elections, Mr. Chubays made an attempt to replace Sagalayev with his “own man” Arkadiy Yevstafyev.  It is said that Sagalayev was defended at the time by [Russian Prime Minister Viktor] Chernomyrdin himself, who was extremely concerned at the strengthening of Chubays’s influence on the ORT and NTV channels.  Rumours are now going around that Mikhail Lesin, recently appointed leader of the newly created Public Relations Administration, is being tipped as [the next] VGTRK chairman.  As a result, some kind of new job is being sought for Sagalayev.
    Meanwhile posters have appeared on Moscow streets proclaiming “Happy birthday, Eduard Mikhaylovich.  The ViD advertising agency.”  This means that Sagalayev is 50 on 3rd October, this is what his former pupils are trying to say.  The jubilee will be celebrated at the Rossiya concert hall.  The guest list includes numerous members of the government and presidential staff personnel.  There will most likely be government awards too—which, incidentally, are no guaranteed protection against subsequent removal.  It should be acknowledged, however, that in the five and a half months of Sagalayev’s reign the Rossiya channel has indeed changed for the better—it has become more solid, logical and watchable.  It should also be acknowledged that real services are never taken into account when a strategic political concept is at stake.

‘Rossiyskaya Gazeta,’ Moscow, October 3, 1996

VI.  Yelstin Proclamation on VGTRK.

    Text of Russian Federation Presidential Edict No 1386 "On Stabilizing the Activity and Improving the Quality of All-Russia State TV and Radio Broadcasting Company [VGTRK] and NTV Television Company Broadcasting," dated 20th September 1996, Moscow, and signed by Russian Federation President Boris Yeltsin, followed by commentary headlined "NTV and Its Universities”; published by `Rossiyskaya Gazeta' newspaper; subheading as published:
    With the aim of stabilizing the activity and improving the quality of VGTRK and NTV broadcasting, I decree that:
    1.  The proposal of VGTRK and NTV, as agreed with the Russian Federal Service for Television and Radio Broadcasting [FSTR], on the transfer of the distribution network of the channel eight frequency [VHF channel R8, which carries the fourth TV programme] (Moscow) to NTV for 24 hours a day shall be adopted.
    2.  The Russian Federation government shall resolve the question of payment for licences for TV broadcasting and activity in the sphere of communications and redraft the licences for television broadcasting and activity in the communications sphere in line with this edict.
    3.  The joint decision of VGTRK and NTV, as agreed with the FSTR, on retaining the combination of educational and cultural broadcasts produced by VGTRK staff on NTV's broadcasting network shall be noted.
    In connection with the aforementioned decision the Russian Federation Finance Ministry and the FSTR shall retain the level of financing of VGTRK within the budgetary appropriations for 1996, as envisaged by the federal budget for the sphere of TV broadcasting.
    4. The Russian Federation government:     5. The Russian Federation President's Main State Law Administration shall submit a proposal amending the Russian Federation president's decisions in connection with the enactment of this edict.

    [Signed] Boris Yeltsin, President of the Russian Federation

Intelnews news agency, Kiev, September 24, 1996

VII.  NTV and Its Universities.

    This letter was sent on 9th June 1996 to the heads of chief executives of the regions.  The letter was signed “Moscow.”
    Come October, it will be exactly three years since the private television company NTV started broadcasting on Russia’s airwaves.  It initially appeared on channel five, but in January 1994 it was allocated 60 evening hours per week on channel four (which is still referred to as the channel eight frequency).
    All this time NTV has happily existed side by side with the “Russian Universities” educational and cultural programmes, which are made by Russian TV, but it has, naturally, dreamt of expanding its airtime.
    The champions of the state model of development for TV proposed, not without grounds, that NTV follow the path taken by TV-6, that is to say, create its own channel from scratch, purchase and launch its own satellites and so forth.  Their opponents, also not without grounds, spoke of the state’s economic inability to maintain the “Russian Universities” educational channel at a decent standard, pointed out its traditionally low ratings and insisted that the whole channel be placed under the complete authority of NTV.
    After long preliminary talks between the heads of Russian TV, NTV and the FSTR, a compromise solution was found, now embodied in the Russian Federation presidential edict published above.  NTV gets the right to broadcast on channel four for 24 hours a day, but has to keep the best “Russian Universities” educational programmes on the air.  These programmes will continue to be made by Russian TV, which, despite the loss of a whole channel, is to retain its full budget financing.
    This reorganization of the airwaves immediately raises several problems:
    First, the problem of who will determine which educational programmes can be described as best and can be left on the air, and which should be peacefully laid to rest.
    Second, we have never before transferred an entire state channel to the ownership of a private television company.
    This phenomenon is unprecedented, and consequently it is not known how much the licences for broadcasting and activity in the sphere of communications will cost NTV.  The Russian government has been instructed to resolve these questions by edict.

Rossiyskaya Gazeta, Moscow, September 25, 1996

VIII.  Duma again recommends ORT renationalization.

    The State Duma today by a majority of votes passed a resolution recommending the Russian president and government to transform the Russian Public Television [ORT] closed joint-stock company into a state television company.  A total of 233 members of parliament voted for the decision and 54 voted against.
    Justifying the passing of this recommendatory document, the legislators said that “the ORT closed joint-stock company, which was established in 1994 and which has the word `public’ in its name, was meant to become a real public television channel in Russia, whose aim could have been to facilitate and join the efforts of all the branches of state power and of society on the whole in reaching consensus and in carrying out social, economic and political reforms.  ORT has not achieved these aims so far.”
    The resolution also says that “the programmes of the ORT closed joint-stock company and the All-Russia State TV and Radio Company [VGTRK] suggest to the public that the Russian parliament is not engaged in fulfilling its obligations and that State Duma deputies are mainly concerned about their own well-being, and this raises the question of whether there is a need for such a parliament in Russia.  Meanwhile, it is being forgotten that State Duma deputies have been elected by the people on the basis of law.”
    The resolution also says that the programmes of the ORT closed joint-stock company and VGTRK “deliberately or otherwise aggravate social tension and confrontation in society and do not promote public accord and the pooling of efforts by the executive and legislative branches of state power in order to develop society.”
    The deputies believe that yet another aim in setting up the ORT closed joint-stock company, as stated by the Russian president and government, which is to reduce the burden on the federal budget, is not being fulfilled.
    “Checks on the activities of the ORT closed joint-stock company being conducted by the Audit Chamber have exposed serious infringements in its finances,” the decision stresses.  “At the same time, auditors of the Russian Audit Chamber note a trend towards a deterioration in the structure of broadcasting.”  The results of one of the checks have been sent to the Russian General Prosecutor’s office, the document says.

ITAR-TASS News Agency (World Service), Moscow, October 4, 1996

IX.  State broadcasting may be cut because of lack of funds.

    In the near future, broadcasting by a number of state television and radio companies may be considerably restricted.  This conclusion was reached today by participants in the coordinating council for extricating television and radio broadcasting stations from their crisis.  The reason given for this conclusion is that the state television and radio companies owe enterprises of the Ministry of Communications 843bn roubles.  Anatoliy Nazeykin, chairman of the Trade Union of Communications Workers, said in an interview for our radio station that next year’s budget includes virtually no funds for normal cooperation between communications facilities and the state television and radio companies.
[Nazeykin]     The Ministry of Economy has forecast that television and radio broadcasting will increase by six hours and external broadcasting by three hours, but the Finance Ministry has cut financing by half compared with this year, 1996.  Therefore, there can be no question of any optimism here.  And even more so because our enterprises have not made preparations for working in winter conditions.  These are high consumers of electricity, they get cut off, stand idle and so on.  There is no optimism here.  On the contrary, there will most likely be strikes because there is no other way out.  You cannot keep people working round the clock without being paid.  I do not think that this can go on much longer.

Ekho Moskvy radio, Moscow, October 2, 1996

X.  Russian Networks Race for the Sky.

By Alexander Chernykh and Jeff Grocott

    Three new start-up television networks are using a mixture of cable and satellite to offer an alternative to Russia’s established channels.  Alexander Chernykh and Jeff Grocott ask whether the networks can find subscribers, viewers and advertisers.
    After years of watching “Swan Lake” and the same handful of old Soviet movies, viewers across Russia will be treated in the next few months to a spate of alternative programming, coming to them over a rush of new channels.
    A wave of new broadcasters are now being launched that will beam into households across Russia by satellite dish, via cable, and even through the old-fashioned rabbit-ear antennas that once only pulled in the signals of the country’s stolid national television channels.
    The first channel of a planned $ 170 million, five-channel NTV-Plus network began broadcasting via satellite Sept.  2.  Also hitting the air in early September was RTR Russian Television’s Meteor Kino movie channel, the first of two satellite/cable channels that RTR plans to put on the air.  Not far behind NTV-Plus and RTR will be REN-TV, which is scheduled to take to the airwaves Jan.  1 as a free, national channel.
    “It’s a very Russian idea.  At first you don’t have anything, then suddenly there’s a whole range (of options),” said Yelena Koneva, the general director of media and market research firm Comcon 2.
    Russian viewers can currently watch the old state-owned channels ORT Channel 1, RTR Channel 2 and the Petersburg Channel 5 plus a couple of national private broadcasters, NTV television and TV6.
    But Koneva said the spate of new channels comes in response to a desire among Russian consumers for programming of greater variety and quality.
    “Russian viewers are not satisfied by the quantity and quality of existing television programming,” Koneva said.  The main reason for viewers’ displeasure, she said, is the “monotony” of current national programming.  To underline this, Koneva pointed to the results of a recent survey by Comcon 2, in which 70 percent of respondents said they would like to see more television programs and channels than are currently available.
    But a large market of television-hungry Russians does not insure success for the companies rushing in to fill the country’s television void.  In order to come out on top, she said, the new broadcasting companies will have to distinguish themselves by offering high-quality programming.  “It’s a very competitive situation,” she said.
    This season’s rush for cable and satellite programming is not only a function of Russians’ perceived need for more television, but also represents how new technologies can be applied to break the gridlock of a technically limited system.
    Russian television relies on an outmoded network of a few central broadcasting sites from which television signals originate.  These signals are bounced around the country from relay station to relay station, which have the capacity to rebroadcast only a limited number of channels.
    Russia’s switch to cable and satellite television allows broadcasters to break out from the limits imposed by this system of local transmitters, following a path that has already been taken in the United States and Europe, said Jon Davey, the director of cable and satellite research at Britain’s Independent Television Commission.
    “What we are seeing is release from the spectrum scarcity which has dominated broadcasting for the last 50 years,” Davey said.  “With satellite and cable, there is the scope to launch new services—and people are rushing in” with new channels.
    The only channel that will use the old-style relay stations—and therefore, the only one that viewers can receive without owning a satellite dish or buying a subscription to a local cable provider—is REN-TV, which is scheduled to start broadcasting at the beginning of 1997.
    REN-TV’s signal will be broadcast by satellite from Moscow and will be received by stations throughout Russia’s regions, said the station’s general producer, Dmitry Lesnyovsky.  Local stations will then rebroadcast REN-TV’s seven hours of programming over standard television frequencies.
    Lesnyovsky said 40 to 50 local broadcasters throughout Russia would take part, and that he expected REN-TV to reach an audience of 65 million viewers.
    RTR’s two new channels—a film channel called Meteor Kino plus a sports channel which will be unveiled later—will also be broadcast over satellites and picked up by regional television stations, but the feed will then be routed through existing provincial pay cable networks.
    The monthly subscription fee for the RTR channels will run at just $ 1.50 to $ 2, said Boris Vishnyak, director of RTR’s satellite project.
    Vishnyak predicted that the channels would reach some 25 million viewers, and said that the Kino Meteor channel was already being broadcast in the regional cities of Arkhangelsk, Orenburg and Minsk.
    In fact, RTR could be tapping into a huge audience.  According to a Comcon 2 survey, 15 percent of the residents of provincial cities watch a local cable network.  Most of them are between 25 and 40, a key target group for advertisers.
    The third start-up, NTV-Plus, is an offshoot of the NTV television network, Russia’s foremost private national broadcaster that started up in 1993.
    It will be the only pure satellite station of the three start-ups in that viewers will pick up the signal directly from a dish, rather than have it routed through a local provider.  For now the station is free to satellite-dish owners, but NTV spokeswoman Tatyana Blinova said that starting in 1997, viewers will be charged $ 8 to $ 10 per month for the network’s five channels.  They will also be charged a one-time fee of $ 140 to $ 150 for a dish, receiver and decoder to unscramble the signal.
    With the backing of Russian banker Vladimir Gusinsky and the blessing of the Russian government, NTV is aiming high with NTV-Plus.
    Gusinsky, whose MOST Group is the majority shareholder in NTV, has earned a stock of government favors because his television station and bank played a key role in backing Boris Yeltsin in his successful re-election campaign.  Igor Malashenko, director of NTV, even joined Yeltsin’s campaign team.
    “He’s the one who won the elections (for Yeltsin),” a source at NTV, who was involved in the conception of NTV-Plus and asked not to be named, said of Gusinsky.  “And now he realizes what television is all about—and he wants more.”
    Since Yeltsin’s re-election, Gusinsky appears to have received a good deal more.
    The main NTV broadcast channel is set to take over sole broadcasting on Channel 4, which it currently shares time on with the state-owned Russian Universities channel, said spokeswoman Blinova.
    Its offshoot, NTV-Plus, was officially registered just after Malashenko took his post in Yeltsin’s staff, said Alexei Zakharov, a State Duma deputy from the Yabloko faction.  He said the expansion of NTV and the founding of NTV-Plus so shortly after the station’s campaign push for Yeltsin “looks like the division of the spoils.”
    According to the source at NTV, Gusinsky himself said he would “take personal charge of, and spend up to 80 percent of his time on, the development of the (NTV-Plus) project.”
    To help him with his project, Gusinsky has enlisted some big names in the television and entertainment business.
    NTV’s chief producer, Alexei Tsyvarev, is managing the whole network.
    Igor Tolstunov, a well-known film producer, will direct the first channel of NTV-Plus, a Russian film channel called “Nashe Kino,” and will also direct the network’s second channel, a foreign film channel to be called “Mir Kino.”
    The three channels that make up the rest of the project will appear later this year, Tolstunov said.
    Alexei Burkov, NTV’s sports analyst, will be in charge of the sports channel and Alexander Gerasimov, currently NTV’s political commentator, will direct the news channel, Tolstunov said.
    The fifth proposed channel, a music channel, has not yet had its top manager designated, but a source at NTV who is familiar with the channel’s music programming said one likely candidate for the position is Sergei Lisovsky, who, like Malashenko, worked on the Yeltsin re-election campaign.
    Lisovsky is currently the head of ORT Russian Public Television’s advertising arm, ORT Reklama.  Until 1995 he was the head of Premier SV, the sole agent for advertising sales on ORT, Moscow’s MTK channel and St.  Petersburg’s Channel 5.  NTV’s advertising time has been marketed by Premier SV’s competitor, Video International.
    Regardless of his skilled and well-connected team, just how high Gusinsky’s new project will fly is open to debate.
    The company’s initial expenses in setting up the station and paying for satellite rental are expected to run at around $ 150 million to $ 170 million, said Tolstunov.  NTV-Plus is expecting to begin to recover its investment in two to three years, he said.
    NTV spokeswoman Blinova would not confirm those figures.  She also declined to name the cost for renting space on two Russian satellites, GALS-1 and GALS-2, from the Communications Ministry.
    But according to Marianna Orlinkova, a freelance television analyst formerly with the daily Izvestia, it will take more than $ 170 million to run a five-channel satellite system and that, judging by the track record of existing international satellite channels, a project such as NTV-Plus would take up to five years to become profitable.
    Orlinkova’s view was echoed by Comcon 2’s Koneva.  “They have a long way to go before they pay back their investment,” said Koneva.
    But Alexander Lapshin, the general director of Kosmos TV, which has operated a satellite network in Moscow for the last five years, said $ 170 million could be a realistic start-up cost—or perhaps even overbudgeted.
    Lapshin estimated that space on a Western Intelsat satellite would run about $ 1.2 million per year, or about $ 6 million for five channels.  Space on a Russian satellite, he estimated, would be cheaper.  Adding rough figures of $ 5 million each for program rights, studio costs and operating expenses, the total cost could well be below $ 25 million.
    In the case of REN-TV, general producer Dmitry Lesnyovsky said he expected the channel to be able to pay off investors after three or four years.
    But he said he expected the company to be making a profit within three or four months.  The income for REN-TV, Lesnyovsky said, would come from advertisers, who will pay about $ 1,500 for a one-minute spot.
    A spokesman from REN-TV’s main sponsor, Bank Moskva, owned by the Moscow city government, said the bank was confident in the station’s profitability.  “This is an absolutely normal commercial project, and we will continue to invest until it begins making a profit,” said the spokesman.
    For RTR’s two new satellite channels, the company said it needed an initial investment of $ 60 million, said Vishnyak.
    NTV-Plus’ film channel “Nashe Kino” hit the air last week with showings of Grigory Alexandrov’s Soviet comedy classic “Volga, Volga” and “Revizor,” a new film by Sergei Gazarov and starring Nikita Mikhalkov, which has not yet been released in theaters.
    For paying subscribers, channel director Tolstunov said, the advantage of NTV-Plus is that they will be spared the increasing advertising found on free channels.
    “It is the usual practice,” said Blinova, “that pay-per-view channels don’t deal with advertising.  People have a right to get exactly what they pay for.”
    But, according to Sergei Khovenko, the director of the Pygmalion advertising firm, NTV-Plus may eventually bring in advertisers.
    “It’s all the same for them,” he said.  “They won’t be able to get good rates for an unknown product, anyway.  If the network becomes popular, we will make them an offer they can’t refuse.  That is also the usual practice.”
    But if NTV-Plus does eventually hope to attract advertisers, the “Nashe Kino” channel may not be the most fertile ground, as it does not promise viewers or advertisers anything they haven’t already seen.
    “All the best Russian movies are already well known to the audience from public television,” said television critic Orlinkova.  “It still happens that different channels show the very same film up to three times a week.”
    Moscow’s Kosmos TV, which, according to its managers, now has in the neighborhood of 500,000 viewers, said it would not consider NTV-Plus a tough competitor.  Kosmos offers 19 channels with foreign language programming and a Russian movie channel.
    “In Moscow, we don’t compete with them,” said Kosmos’ Lapshin, noting that NTV-Plus will be showing the same programming—Russian and foreign films, sports and news—that Kosmos already offers.  “I don’t think people will be willing to buy one channel when they could be in the position to buy 20.”
    According to Sergei Bednov of the Russian television guide TV Park, NTV-Plus’s “Nashe Kino” will have a tough time filling the airwaves with interesting programming.  “To fill an annual program you should put together more than 700 movies.  But the number of really good Russian films is restricted.
    According to Orlinkova, the biggest obstacle for NTV-Plus will be to convince people to pay for television—something they are used to receiving free.  NTV-Plus may have a good chance drawing viewers with original news and sports programming, she said, but that must still compete with products offered on Russia’s free channels.
    To get a hand into the public’s pockets, she suggested, the new wave of channels should offer something viewers don’t already have, like good cartoons for kids.  “Children are the best motivation for their parents to spend money,” she said.
    People might also shell out money for television if they thought it was a sign of prestige, she said.
    If it appears that NTV-Plus might not have an exact handle on who its audience actually is and why they should buy the product, it may be because the station may not have all the bugs worked out.
    A source from NTV, who had been involved in the channel’s inception, said the company’s development strategy and financial forecasts have not been based on serious market research.  Fine-tuning or overhauls to the system will have to come after the launch.
    NTV head Malashenko, in a recent interview with the Russian weekly television guide Syem Dnei, expanded on this strategy: “Everything is done according to the principle.  First go into combat, then see what happens.”
    Sergei Rybak contributed to this report.

Moscow Times, September 10, 1996

XI.  Far East radio broadcasting under threat.

    At a meeting on the implementation of state policy for the media, participants in a plenum of Russia’s federative council of journalists have stressed the role of radio broadcasting as a major source of information. Here is what Georgiy Klimov [phonetic], director of radio broadcasting at the Vladivostok TV and radio company, had to say:
[Klimov—recording]      Radio plays a major role in the Maritime Territory and the Far East in general because it is currently the only reliable source of information. The Maritime Territory has been hit by an energy crisis. Electricity is switched off from about seven or eight in the evening until 11 p.m. or midnight. People are not watching news programmes, either local ones or those from Moscow. Radio remains the only source of information. In remote areas, the situation is even worse. We used to have a very good cable radio network. But now very many areas have lost even that link. Pylons have fallen down and cables have been destroyed in storms, but it is too expensive to repair the damage.
    Newspapers have small print-runs in our territory. The ‘Vladivostok’ newspaper has the largest circulation—over 100,000 copies—but it is sold mainly in Vladivostok. The local press, regional and city newspapers are the main medium of information. Editorial offices are limited in their sources of information. The Far East department of ITAR-TASS has stopped functioning. The government simply could not find the money to keep journalists on. And now the territorial administration’s press department is the main source of information. Well, you will understand that this information comes from one and the same source. Maritime Territory residents get no objective information.
    I stress once again that radio remains the only source of objective information about events in Russia and in the Maritime Territory and the Far East. Unfortunately, the state radio operates only on mediumwave or on VHF on frequencies which modern receivers no longer have. In the Maritime Territory, the only state radio stations accessible to the population are Radio Mayak and Yunost Radio. Yunost Radio seems to have a weak relay station and its programmes can only be heard near Vladivostok. Mayak can be received practically everywhere throughout the southern Maritime Territory.
    I was on a business trip in the northern [Maritime] Territory and found out that neither Radio Russia, Mayak or Yunost can be heard there. It is a zone of silence. They can tune in to Radio Liberty, the Voice of America, Chinese, Korean and Japanese radio stations, but not Russian ones. So the Maritime Territory’s northern and central areas are living under an information blockade.

Ostankino Radio Mayak, Moscow, October 12, 1996

XII.  New satellite TV channel STS to launch in December.

    On [1st December], those who like entertainment programmes and feature films will get the opportunity to watch them on a new channel.
[Correspondent]     The Satellite Television Network, or STS, is the name of the new channel. It will start broadcasting in Russia’s regions on the first day of winter. The network will show Disney cartoons, the best Russian and foreign films, sports programmes for men and drama serials for women. . . .
    There is no need for television sets to be fitted with any additional equipment. Broadcast schedules will follow real time. If Muscovites watch the “Fomenko” [quiz] programme at 1900 [Moscow time], [viewers in] Kaliningrad and the Far East will both see it at the same time as Muscovites. . . .
    The STS channel may well be competing against ORT [Russian Public TV] channel one. By the end of 1997, STS plans to broadcast for 15 to 17 hours a day in 70 cities in Russia. By the time the channel is launched, it will have signed broadcasting agreements with 40 Russian [local] television stations. In Moscow, the network will begin operations a little later because of the work to be done to replace the aerial equipment, while in the regions the channel will start showing programmes on 1st December.
    [ITAR-TASS on 1st November said STS was an acronym for Sodruzhestvo Televizionnykh Stantsiy (commonwealth of TV stations), and its director-general was Sergey Skvortsov. STS referred to itself as a commonwealth because it comprised a grouping of Channel 27 in Moscow, Channel 6 in St Petersburg and transmitters in Yekaterinburg, Perm, Nizhniy Novgorod, Samara, Omsk, Kazan and some other cities. The new channel planned to provide “family entertainment for all ages,” and had established contacts with the Disney Corporation, Warner Brothers, Worldvision and New World, among others.]

Russia TV channel, Moscow, November 4, 1996

XIII.  Government repays debt arrears to media sector.

    The government of Russia has repaid the federal budget arrears to the employees in the spheres of education, culture, media and health services ahead of time, Vice-Premier Vitaly Ignatenko said in an interview with ITAR-TASS and Russian television broadcasting companies today.
    “We have now the full right to say that the government has coped with the tasks which it set for itself and has even overfulfilled its plans. I hope that we shall continue to work at this rate,” the vice-premier said. . . .
    A total of 87.2bn roubles (26bn roubles more than the target 61.2bn) has been transferred to the mass media. . . . 
    The decision to repay the arrears was made at a conference held by Prime Minister Viktor Chernomyrdin on Monday [4th November] evening, Ignatenko said.
    He recalled that earlier the government had promised to repay the arrears for the period of up to 1st November not earlier than by 15th November. “As soon as an opportunity offered itself to do so at an earlier date and in the amount exceeding considerably the earlier promised one, we made this decision,” Ignatenko said.
    The resources required to repay the arrears to the most important sectors in the social sphere and the mass media were mobilized in the past few weeks as a result of changes in the situation with the replenishment of the federal budget revenues, primarily tax revenue, Ignatenko said.
    He said the collection of taxes had been facilitated by the activity of the recently created Temporary Extraordinary Commission to strengthen the tax and budgetary discipline. The presidential commission is headed by Prime Minister Viktor Chernomyrdin.

ITAR-TASS news agency (World Service), Moscow, November 5, 1996

XIV.  Gazprom buys 20% stake in Top Daily.

By Sophia Coudenhove

    Shareholders of Komsomolskaya Pravda, Russia’s largest circulation daily newspaper, voted Friday to sell a 20 percent stake to state-controlled gas monopoly Gazprom, extending the giant corporation’s already impressive portfolio of influential media property.
    Gazprom, 40 percent state-owned and a vocal supporter of the current government, already owns stakes in two national TV channels: a 30 percent stake of NTV television and an undisclosed stake in RTR, another major Russian television channel.
    The purchase of Komsomolskaya Pravda, a Moscow-based daily with a circulation of 1.4 million, spreads Gazprom’s influence into print media.
    “We’re extremely pleased with today’s vote,” said Komsomolskaya Pravda chairman Vladimir Sumgurkin, after shareholders, mostly company employees, approved the deal.  “It presents us with many new possibilities and will in no way affect the paper’s independence.”
    Sumgurkin said the deal would probably be signed by the end of this year.
    He said the newspaper will hand over its shares in exchange for investment in technical restructuring—from satellite communications to computers and printing plates—in the 40 Russian cities in which the newspaper is published.  No sum was disclosed for the total value of the investment.
    Komsomolskaya Pravda, which was founded in 1925 as about them.  They’re always interested in political stability,” he said.  “And we’re a paper that already supports social peace, democracy and social development.  So we have a common understanding of things and they won’t need to get involved in our editorial policy.”
    His reporters appeared to be in full agreement.
    “We support Gazprom as one of the strongest supporters of our national industry,” said economics reporter Sergei Blagodarov.  “Gazprom holds Russia together like a stick holds a shashlik and we’d support them even if they didn’t give us money.  They don’t try to influence what we write.”     Gazprom has close ties with the government.  Victor Chernomyrdin ran the company before becoming prime minister in 1992 and is believed to be a major shareholder.
    Blagodarov said his newspaper had rejected investment offers from other companies including Alfa Bank and Inkombank “because they offered too little money and because they’re wild capitalists.”
    Gazprom will appoint a representative to the company’s executive council, Sumgurkin said, adding that the council has no editorial say.
    He said Komsomolskaya Pravda has been making a profit for over a year and that Gazprom therefore hopes to make an economic, rather than political gain from the paper.
    But according to one expert, it is unlikely that this is the driving force behind Gazprom’s potential investment.
    “I don’t think they’re investing in Komsomolskaya Pravda to make money,” said Yasen Zasursky, dean of Moscow State University’s journalism faculty.  “I think they want to look human as an investor in the media and they want to diminish criticism in the press.”
    Gazprom officials could not be reached for comment Friday, but have said in the past they are trying to be “actively present” in the mass media.
    Foreign media and international lending agencies like the International Monetary Fund and the World Bank have criticized Gazprom, Russia’s biggest exporter, for using its political influence to avoid tax.  Few Russian media outlets, however, have taken up the issue.
    Gazprom, which is planning to start selling its shares on world markets this month, recently lashed out at foreign media for reports that accounts of its regional subsidiaries had been frozen and assets seized by the government in an effort to recoup 15 trillion rubles ($ 2.8 billion) in back taxes.
    The Komsomolskaya Pravda sale extends a trend among large Russian companies with close ties to the government who have increasingly moved into the Russian media.  The MOST Group owns a major stake in NTV television and the Segodnya daily newspaper.  Stolichny Savings Bank is a shareholder in the major financial daily Kommersant Daily.  A consortium led by Boris Berezovsky, president of auto company Logovaz and the Sibneft oil company, controls ORT television.
    Many of these media outlets were accused of bias towards President Boris Yeltsin during the presidential election campaign.
    Komsomolskaya Pravda’s average circulation of 1.4 million rising to 2,250,000 copies on Fridays makes it a major force in forming Russian opinion, analysts said.
    “They have a big influence in places like Siberia and other areas where Gazprom has pipelines and reserves,” Zasursky said, adding that it was too early to say whether the company was likely to affect Komsomolskaya Pravda’s editorial policy.
    Gazprom earlier this year signed a deal on launching U.S.  communication satellites, but Sumgurkin said it was unlikely that these would be used by his newspaper.

Moscow Times, October 5, 1996