Post-Soviet Media Law & Policy Newsletter


Issue 37     Benjamin N. Cardozo School of Law     June 13, 1997 

Signs of the Times

I.  Two TV stations to share Channel 3 in Moscow region.
II. New Threats to Press Independence Emerge.
III.  Financial Interests Vie to Control Komsomolskaya Pravda.
IV.  Financial Interests Vie to Control Komsomolskaya Pravda: Commentary by editor in chief, Valery Simonov.
V.  Yeltsin orders TV bosses to carry more provincial news.
VI.  Accusations against federal TV-radio service.
VII.  Who are the top 10 spenders on TV advertising in Russia as of January 1997?
VIII.  Advertising Extra.
IX.  What are Russia's top 13 publications?




I.  Two TV stations to share Channel 3 in Moscow region.

   The Russian airtime licensing commission has granted licenses for the use of Channel 3 to two companies—one to the TV-Tsentr [TV-Centre] company and another to the Moskovia TV company.
    The commission members did not conceal their intention to create a sort of “a shared flat” by granting the right to broadcast on the same wavelength to two TV companies for a period between three to five years, despite Moskovia’s protests.
    Its leaders recalled the negative experience of coexistence of several TV companies on one channel. Russian Public Television [ORT] and the Mir broadcasters have only just survived on Channel 1, the NTV [Independent Television] company and the VGTRK (Russian State TV and Radio Broadcasting Company) went through a “divorce” on Channel 2, and Tele-Expo keeps cutting short programmes aired by St Petersburg Channel 5.
    The Licensing Commission would not budge as its decision had been predetermined by an accord between the mayor of Moscow [Yuriy Luzhkov] and the head of the Moscow regional administration, who agreed to share the same wavelength and thus comply with President Yeltsin’s decree which apportioned Channel 3 to the entire Moscow region, Moscow city included.
    The question about new licenses and new broadcasters has come to the fore now because the terms of the licenses allowing Moscow TV and the 2x2 commercial broadcasting company to use Channel 3 expire on June 6th.
    The two companies were to be replaced by two other broadcasters. As concerns TV-Tsentr, the Moscow city government is its cofounder and TV veteran Anatoliy Lysenko, who now heads the Moscow city government’s telecommunications and media department, is its “godfather.” He has worked for years to give Moscow a TV channel of its own that “would be worthy of the Russian capital.”
    The two outgoing broadcasters—Moscow TV and the 2x2 company—said they would not seek the prolongation of their licenses, but Moskovia, representing the regional authorities, was adamant to get as much airtime as possible.
    The agreement signed between the Moscow city and the regional authorities gave Moskovia 125 minutes on weekdays, 45 minutes on Saturdays and 35 minutes on Sundays. TV professionals say this political compromise does not fully meet the interests of the TV viewers in the region who will, as a result, have to watch “sandwich programs” from two different companies.
    Many commission members believe that express efforts should be made to win more airtime for each of the users instead of dividing the existing time slots between them.
    They insist that Moskovia should do its best to acquire a full-time channel of its own, instead of just gaining slightly more priceless prime time on the same channel with a rival, which will hardly be good for the airing schedule on Channel 3.
    Deputy chairman of the Licensing Commission and president of the Fund for the Protection of Glasnost (Openness) Aleksey Simonov described the decision as “unnatural” and expressed the hope that the rival broadcasters would have an opportunity to go their own ways within the next three years.

ITAR-TASS news agency, May 14, 1997.

II.  New Threats to Press Independence Emerge.

By Aleksei Filippov

    The situation with regard to two of the country’s main newspapers, Komsomolskaya pravda and Izvestia, has finally become clear. Komsomolka’s independent existence has come to an end: 59% of its shareholders supported a decision by the supervisory council of the Komsomolskaya pravda closed-type joint-stock company to sell 20% of the newspaper’s shares to ONEKSIMbank [United Export-Import Bank]. The conflict over Izvestia—which reprinted an item from the French newspaper Le Monde on Chernomyrdin’s alleged $ 5-billion fortune and, as a result, clashed with its main shareholder, Lukoil, which owns 41% of the newspaper’s shares—is also coming to a close.
    Many people are now wondering what is behind these events, and whether our government has launched a massive campaign to tame the press. In the opinion of Komsomolka editor in chief Valery Simonov, that is precisely what is happening. And Komsomolka is not the only paper involved, in Simonov’s view.
    “Look at what’s happening to Izvestia, Rabochaya tribuna, Selskaya zhizn [Rural Life] and Moskovsky komsomolets,” said Simonov. . . .
    Power at Komsomolka is now wielded by Vladimir Sungorkin, chairman of the Komsomolskaya pravda joint-stock company, and his team. . . .
    [Valery Simonov said that] under a new charter to be adopted in May, the new editor in chief will be appointed by the Board of Directors, which will include two representatives of ONEKSIMbank. A contract will be concluded with the new editor, and it will be possible to dismiss him at any time. What sort of independence will there be to speak of then?
    Mikhail Kozhokin, [vice-chairman of the board at ONEKSIMbank], asserts that the bank will not interfere in editorial matters and that it will only prohibit the publication of paid promotional articles in the newspaper and stop Komsomolka from getting involved in any “mud-slinging wars.” Let’s hope that proves to be the case, but it’s hard to believe that everything will be quite so idyllic. Another alarming fact is that one of the newspaper’s leading reporters, Pavel Voshchanov, and a number of other staffers have been invited to leave Komsomolka. An ONEKSIMbank spokesman said his institution had absolutely nothing to do with that. . . .
    The situation that has arisen with regard to Izvestia and Komsomolka is typical of these times. Today money is playing the role that used to be played by the CPSU Central Committee’s province committees and its propaganda department, and the myth of an independent press seems to be fading once again, like a mirage. Although world experience doesn’t offer grounds for overly romantic illusions on this score either.
    We must proceed from reality, no matter how grim it is. The press, like any enterprise, inevitably enters into relationships with partners and becomes dependent on them. Any measure of objectivity here is limited by the partners’ interests, and it would be naive to believe that the organizations that finance the press are going to do anything contrary to their own interests.
    Russia differs from the developed democracies in that here these organizations, no matter how powerful, are to a tremendous extent dependent on the government, which has enough levers at its disposal to bring any financial or industrial organization to its knees. It is clear that at a critical moment, these organizations are not going to risk their independence, which is as illusory as that of the press.
    Under these circumstances, the independence of the press is receding even further into the realm of myth.

“Business as a Millstone Around One’s Neck. Will Izvestia and Komsomolka Re-Emerge?”, Obshchaya gazeta, No. 15, April 17-23, 1997, p. 2. [Condensed text]

III.  Financial Interests Vie to Control Komsomolskaya Pravda

By Yadviga Yuferova

    The struggle among Russian magnates for influence over the news media is taking a new tack. I am referring to the situation that has developed in the past few days at Komsomolskaya pravda, whose founder is the newspaper’s journalistic collective. An annual shareholders’ meeting of the Komsomolskaya pravda closed-type joint-stock company scheduled for March 21 was supposed to examine the question of proposed investments. The editorial board had not been expecting any surprises, since the plan was to give final legal form to the sale of 20% of the company’s shares to Gazprom [the Gas Industry joint-stock company], a sale that had been announced last year and approved by the shareholders.
    Last week, however, Vladimir Sungorkin, chairman of the board of the Komsomolskaya pravda joint-stock company, announced that a decision to assign 20% of the shares to ONEKSIMbank [United Export-Import Bank] had been drawn up in the form of an official document. . . .
    “According to my information,” says editor in chief Valery Simonov, “this transaction is the work of certain well-known political personages who distinguished themselves when that unforgettable box was carried out of the White House [a reference to Anatoly Chubais—Trans.]. This is not rivalry between the Gazprom joint-stock company and ONEKSIMbank for the information business, but a real struggle by a progovernment financial structure for influence over Komsomolskaya pravda. . . .
    “A very distressing thing is happening at KP now—shares are being bought up on a large scale. All moral principles are going by the boards. Packages of dollars are being thrust in people’s faces in exchange for loyalty. When that doesn’t work, blackmail and attempts to intimidate people with the prospect of losing their jobs are used.” . . .
    At present, the news media market is predominantly under the influence of two major fighters for freedom of speech. But while Vladimir Gusinsky does this openly and has publicly concentrated on the MediaMost holding company, Boris Berezovsky, despite his state position [as Deputy Secretary of the Security Council—Trans.], continues his financial, and hence political, expansion. ORT [Russian Public Television], TV-6, Nezavisimaya gazeta—what will be next? Does Komsomolskaya pravda now find itself on that list? The Security Council Deputy Secretary’s information business is shrouded in deep secrecy.
    “Boris Berezovsky has nothing to do with this transaction,” asserts Vladimir Sungorkin, chairman of the board of the Komsomolskaya pravda joint-stock company. . . “We are the ones who found ONEKSIMbank an interesting economic partner that has an interest in objective information.” . . .
    On behalf of its investor [Gusinsky], the Sevodnya group is buying up shares from Komsomolskaya pravda employees. Shares are votes. One vote costs from $ 500 to $ 700—that’s the current market price. . . .

Is the Slogan “Komsomolskaya Pravda is sold only to its readers” Obsolete?, March 19, 1997, p. 2. [Condensed text]

IV.  Financial Interests Vie to Control Komsomolskaya Pravda: Commentary by editor in chief, Valery Simonov.

    [On March 14] the newspaper’s collective learned, quite unexpectedly for most of us, that the board of supervisors of the Komsomolskaya pravda closed-type joint-stock company had decided to draw up an official document assigning 20% of the shares in the Komsomolskaya pravda company to ONEKSIMbank [United Export-Import Bank]. . . . Everything was kept a deep secret from the newspaper’s collective. Suffice it to say that neither the editor in chief—myself, that is—nor the editorial board, let alone the paper’s collective, was informed of the decision that was in the making. . . .
    We were also surprised by the haste with which that step, a serious one for the newspaper, was taken. The decision was made last Thursday [March 13], and all the documents were signed on Friday.
    For that reason, the editorial board, which examined the developing situation yesterday, believes that what is behind all this is not a desire to find a general investor and solve our problems, but some kind of political game. The second round of the struggle for the news media has begun, if one may put it that way. The President’s staff has long tried to find some kind of levers it could use to influence our newspaper. As you know, KP has taken a very critical attitude toward processes and events taking place in the country. . . .

The Press: Oneksimbank Takes a Fancy to Komsomolskaya Pravda—Valery Simonov, Komsomolskaya Pravda’s Editor in Chief, Believes a Second Stage Has Begun in the Struggle for the News Media in Russia, Nezavisimaya gazeta, March 18, 1997, p. 2. [Excerpts]

V.  Yeltsin orders TV bosses to carry more provincial news.

    Federal President Boris Yeltsin demands broader coverage of provincial developments, in particular, the emergence of new governmental and managerial patterns, he says in today’s instruction to Sergei Blagovolin, general director of the national ORT [Russian Public TV] company (Channel One), and Nikolai Svanidze, president of VGRTK [All-Russia State TV and Radio Company] (Channel Two).
    The managerial staff of ORT are well aware of the importance of this task. The company is doing much to acquire a true national scope, not only in terms of the popularity of its programmes with the audiences, and of transmission range, but in thematic diversity and the number of information sources. The personnel agree with President Yeltsin’s criticism on many points, Mr Blagovolin said in a RIA interview.

RIA news agency, Moscow, April 25, 1997

VI.  Accusations against federal TV-radio service.

    Accusations of corruption and bribe-taking in the Russian Federal Service for TV and Radio Broadcasting [FSTR] published in a Moscow newspaper have evoked regret, not indignation, in service head Valentin Lazutkin.
    Although the newspaper article said Lazutkin himself was not involved in any abuse of office, the man expressed surprise that the Licensing Commission should call an emergency meeting to discuss the publication of unverified information.
    According to Lazutkin, the documents which the article was based on had been anonymously sent out to many leaders of the TV and Radio Service, members of the Licensing Commission and to journalists covering the activity of the mass media.
    Lazutkin said the anonymous author of the attack could be figured out easily because [a] few people were feeling hurt by the commission’s refusal to grant licenses they were seeking to obtain.
    He said nonetheless that the TV and Radio Service would not demand satisfaction and take the newspaper editor to court, both because it would be a pity to waste time on squabbles and because attacks on the service were not new.
    “We have felt and will continue to feel pressure from different sides,” Lazutkin said, including from the criminal world and Russian and foreign business bosses. “Those who are thirsty for power while the president is alive and healthy also add to the pressure,” he said.
    Lazutkin said the service had been created a mere two years ago and could not be responsible for the hundreds of licenses that had been granted before its time and could no longer be traced even in the archives.
    Even when the service was granted the right to grant licenses independently, it preferred to hand over these functions to the public Licensing Commission, made up of representatives of government departments, public organizations of journalists and workers in culture, as well as prominent electronic media professionals. The Commission is headed by Dean of Moscow University’s Journalism Department Yasen Zasurskiy.
    Lazutkin said he was also aware of the fact that some broadcasters who had obtained their licenses free of charge later engaged in reselling the same at a profit after making slight changes to the list of the founders. But while the TV and Radio Service can control the broadcasting activity, it may not intervene in the managerial process, as such intervention is prohibited by law, Lazutkin said.
    According to the service leaders, it is not normal that too many companies financed by foreign capital are operating in Russia. No other civilized country permits foreigners to monopolize its airtime so actively, he said.
    Lazutkin said the Licensing Commission would have “a titanic amount of work to do this year,” with around 600 licenses needing revision after the expiry of their five-year terms.

TAR-TASS news agency (World Service), Moscow, May 14, 1997

VII.  Who are the top 10 spenders on TV advertising in Russia as of January 1997?

    In order from 1 to 10, including rank January of last year and spending in dollars, they are: Procter & Gamble (1)—$9.2million; SmithKline Beecham (11)—$3.7 million; Wrigley (2)—$3.2million; Unilever (8)—$3.1 million; Nestle (16)—$2.3 million; Dandy (5)- $2.3 million; Johnson & Johnson (?)—$2.1 million; Soyuz Studio (13) -$1.1 million; L Oreal (7)—$1.0 million; Mars Russia (3)—$1.0 million.

The Moscow Times, 4 March 1997

VIII.  Advertising Extra.

    Advertisers spent between $274 million and $597 million on all channels in Russia in 1996, depending on who you ask. It costs about$1 to reach 1,000 viewers in Russia, compared to $15 per 1,000 in the U.S.The average rates per minute of advertising on the major channels is$10,000, though one minute of prime-time can cost up to $30,000. Ad time on all TV channels reached 7.6 million seconds in 1996. Two large companies,Premier SV and Video International, are the sole brokers of television advertising time on Russia s main channels, buying up air-time a year in advance and reselling it to advertisers through a combination of package deals, discounts and long-term contracts.

The Moscow Times, 4 March 1997

IX.  What are Russia’s top 13 publications?

    From 1 to 13, including type of publication and circulation, they are: Center Plus (shopper)—5 million; Speed Info (racy tabloid)—3.8 million; Argumenti iFacti (weekly)—3.4 million; Extra M (shopper)—2.9 million;Komsomolskaya Pravda (daily)—1.5 million; Trud (daily)—1.4 million; Economika i Zhizn (business weekly)—1.2 million; Moskovsky Komsomolets (daily)—1 million; Sport Express (sports daily)—850,000; Izvestia (daily)—630,000; 7 Days (TV, personality)—450,000; Sevodnya (daily)—100,000; Nezavisimaya Gazeta (daily)—50,000.

The Washington Post, 31 March 1997