MEDIA NEWS FROM DUMA
I. Yeltsin edict gives NTV all-Russia status.NEWS ON FREEDOM OF EXPRESSION
II. Yeltsin decree on TV and radio broadcasting.
III. Yeltsin upgrades NTV to All-Russian TV company status.
IV. Paper views Duma debate on state support for VGTRK.
V. Paper sees draft media laws as Duma’s “revenge.”
I. Tatarstan TV chief sacked for alleged political censorship.OTHER MEDIA NEWS
II. Volgograd governor tightens grip on media.
III. Nizhnii mayor rewards critics.
I. Paper assesses VGTRK’s growing political clout.
II. TV groups oppose on-screen “violence and sensuality.”
III. Paper reviews recent political manoeuvres in TV.
IV. Setting of joint radio and television company agreed.
V. Alleged reasons for murder attempt on NTN-4 head given.
VI. Paper views media mogul Gusinskiy’s business interests.
VII. New TNT station broadcasts through regional networks.
I. Yeltsin edict gives NTV all-Russia status.
By an edict [on 22nd January]
Boris Yeltsin gave the NTV [Independent Television] Television Company
the status of an all-Russia company. This marks the end of its conflict
with the State Antimonopoly Committee, which had threatened the TV company
with the prospect of facing losses running into millions in 1998.
The [new] status of all-Russia
TV and radio company is of colossal value to NTV. This became clear
at the end of December last year, when the Antimonopoly Committee brought
a case of violation of antimonopoly legislation against NTV. The committee
considered it illegal for NTV to pay communications workers to carry its
TV signal at state rates—just like ORT [Russian Public Television] and
the All-Russia State Television and Radio Broadcasting Company [VGTRK].
The Antimonopoly Committee ruled that there were no legitimate grounds
for this. NTV had been authorized to use the state tariffs in January
1996 by the then Russian Deputy Minister of Communications Mikhail Yelizarov,
in place of the former practice whereby NTV paid a “supplement” for the
signal. For instance, NTV used to pay two or three times more than
the state tariffs for the use of particularly powerful transmitters set
up mainly in regional centres.
Having clarified all these
details, on 8th December 1997 the Antimonopoly Committee instructed the
State Committee for Communications and Information Technology that NTV
should pay not the state tariffs but “contract” prices. Kommersant Daily
has learned that communications workers throughout Russia were very happy
to start carrying out the State Antimonopoly Committee’s instructions and
started inundating NTV with faxes putting forward “business proposals.”
According to Kommersant-Daily’s information, the NTV budget had earmarked
17m dollars for the “signal” in 1998. Abolition of the state tariffs
left NTV facing losses of up to 30m dollars.
The NTV leadership went
into action. But the attempts by Igor Malashenko and Vladimir Gusinskiy
to reach agreement with Communications Minister Krupnov to make provincial
communications operatives moderate their appetites came to naught.
NTV’s efforts in the Moscow Court of Arbitration were only slightly more
successful. On 5th January under a lawsuit from the NTV Television
Company Limited Partnership the courts suspended implementation of the
State Antimonopoly Committee’s instructions until the suit was settled.
But it was only at the Presidential
Staff that the NTV leadership achieved genuine success. Yesterday
Boris Yeltsin signed an edict making amendments and additions to the 6th
October 1995 edict “On the improvement of television and radio broadcasting
in the Russian Federation.” It said: “It is recognized that the VGTRK,
ORT, NTV and the Mayak Radio Broadcasting Company are all-Russia TV and
radio broadcasting organizations broadcasting on the territory of more
than half of the Russian Federation’s components.” This list now
includes the NTV TV Company.
Yet just two days ago Anatoliy
Nazeykin, chairman of the Communications Workers Trade Union Central Committee,
had sent Boris Yeltsin, Viktor Chernomyrdin, and Gennadiy Seleznev messages
demanding that no edict should be adopted which would “contravene existing
legislation—particularly the law on communications, which states that private
companies cannot transmit their programmes at state rates.” In Nazeykin’s
opinion, in the event of the edict being signed communications enterprises
would find themselves in an even more difficult financial position.
According to him, the total amount owed to the communications sector by
TV and radio companies already comes to around R1000bn “old” roubles and
there is a R150bn difference between commercial and state tariffs.
Despite this, the president’s
edict instructs the government to ensure “equal conditions of economic
activity for all-Russia TV and radio broadcasting organizations, irrespective
of their forms of ownership, including the establishment of a single tariff
for communications services in disseminating TV and radio programmes.”
This means that NTV will again pay just 17m dollars for the signal in 1998.
Attention is drawn to the
fact that of the private TV companies only NTV has been equated with the
federal broadcasters—TV Centre and TV6 have been left out in the cold.
But in the very near future it is planned to introduce unified tariffs
(exceeding the prime cost of disseminating the signal) for all broadcasters.
Moreover, TV Centre and TV6 historically do not have direct contracts with
communications workers as NTV does. In particular, TV6, which covers
most of Russian territory, uses a so-called virtual network to disseminate
its signal, whereby programmes are relayed by regional broadcasters.
It is interesting that the
edict on NTV came literally three days after the redistribution of powers
within the Russian government. As is well known, Anatoliy Chubays
ceased to be in charge of the mass media, which went to Vladimir Bulgak—with
whom Gusinskiy has always had an excellent relationship. But, according
to an informed member of the government apparatus, the edict was in preparation
even before the redistribution of powers and Bulgak was not in charge of
it.
Thus, NTV has managed to
achieve its aim by going through the presidential staff. The staff
had an excuse for giving a present to Russia’s largest private TV company—NTV
celebrates its fourth anniversary Tuesday.
“NTV not facing bankruptcy, as long as Chubays is not involved in the media, at any rate,” ‘Kommersant Daily,’ Moscow, January 23, 1998
II. Yeltsin decree on TV and radio broadcasting.
The Russian Federation president
has decreed that the All-Russian State Television and Radio Broadcasting
Company [VGTRK], Russian Public Television [ORT], the NTV [Independent
Television] company and the all-Russian state radio broadcasting company,
Mayak, be regarded as Russia-wide television and radio broadcasting organizations
which broadcast to over half of the constituent parts of the Russian Federation.
This is stated in Boris
Yeltsin’s decree “On introducing amendments to the Russian president’s
decree No 1019 of 6th October 1995 ‘On improving television and radio broadcasting
in the Russian Federation,’” which was received by ITAR-TASS from the head
of state’s press service.
The Russian president instructed
the government to ensure equal conditions for the economic operation of
the Russia-wide TV and radio broadcasting organizations, irrespective of
their form of ownership, and including the establishment of a single tariff
for communications services to broadcast television and radio programmes.
ITAR-TASS news agency (World Service), Moscow, January 21, 1998
III. Yeltsin upgrades NTV to All-Russian TV company status.
Russian President Boris
Yeltsin [on 21st January] amended his own decree of 1995 and included the
NTV [Independent Television] private television company in the list of
All-Russian television channels. Our correspondent, (Masha Survila),
tells us why the decree signed is of such importance to NTV:
[Correspondent] A conflict between the NTV and the State Anti-Monopoly
Committee [of the Russian Federation] started last year. Difficult
times of waiting started for the company on 8th December. On that
day the antimonopoly committee instructed the State Committee [of the Russian
Federation] on Communications and Information to stop charging NTV for
broadcasting the signal at state tariffs and move over to charging at contract
prices.
It was clear to everyone
that should this decision ever come into force the television company will
soon join the ranks of the loss-making companies. According to the (?’Kommersant-Vlast’)
magazine, the NTV company is currently paying 17m dollars per year for
the signal. According to different reports, the new tariffs would
increase this sum by 1.5 times, and maybe three times, which, you would
agree, is quite significant.
By most modest estimates,
the conflict between the antimonopoly committee and the television company
would have inflicted on the NTV company damage amounting to 30m dollars.
It has become clear today that the state will not be able to get extra
money from NTV. A presidential decree, dated today, includes the
NTV television company in the list of All-Russian companies, and this means
in the list of companies that enjoy all the privileges due to such companies.
[Presenter] The All-Russian channels also include the All-Russian State
Television and Radio Broadcasting Company [VGTRK], Russian Public Television
[ORT] and the Mayak radio station.
Ekho Moskvy radio, Moscow, January 21, 1998
IV. Paper views Duma debate on state support for VGTRK.
At the end of the first plenary
day following the winter recess the State Duma gave a first reading to
two draft laws whose indigestibility stockbrokers have been talking about
for such a long time.
The first of them, the draft
of amendments to the Russian Federation Law on the Mass Media, was allocated
the unlucky number 13 on the agenda. The second, the so-called Law
“On State Control of and Support for the All-Russia State Television and
Radio Broadcasting Company [VGTRK],” was allocated the entirely safe number
14. But the consequences for the mass media themselves could develop
contrary to the conventional numerical designation—there is a good chance
that additions and amendments to the Law on the Mass Media (admittedly,
given absolutely essential substantial additional work) will benefit the
information sector. Which is actually why they have been drawn up.
Because current mass media legislation lacks even a concept of ownership
of the mass media and consequently the inevitable business expansion into
this sphere has so far been devoid of any legal regulation. The amendments
and additions clearly define the rights and obligations of the new rich
owners of newspapers and the airwaves, partly limiting their tyranny, which
is why they will hardly be to the liking of the press’s nouveaux riches.
Russia TV facing “tyranny” of the state
But the Law “On State Control
and Support,” if it is eventually passed, will on the contrary open the
floodgates to tyranny on television’s Channel 2 [Russia TV], but to the
state rather than to businessmen. It is, of course, necessary to
limit airtime’s subordination to the vagaries of business, especially the
advertising business.
There are ways stipulated
by laws. There is a ban on tobacco and alcohol advertising.
There are limits on the time allowed for advertising slots, especially
within news, arts and cultural and educational broadcasts, and so forth.
There are channels without any advertising at all (Channel 5 on television
[Kultura TV], Radio Orfey [classical music station]). But . . . .
this requires funds. Not just large but enormous funds. There
is nowhere to get them from except from the budget, that is to say out
of our own pockets. The selfsame Channel 2, the only federal channel
that is still state-run, gets only 29 per cent of its funding from the
budget. What does the draft law adopted by the Duma on alleged “support”
for it offer? According to this document, Russian television advertising
should be totally banned. Practically this will mean only one thing—a
reduction in this particular company’s broadcasting by exactly the same
two-thirds-plus which is now funded through advertising, that is to say
from 14 to four hours, and . . . that the time freed up will be filled
with snappy commercial advertising broadcasts.
Zhirinovskiy attacks Russia TV and other media
But now [Vladimir] Zhirinovskiy
[leader of the Liberal Democratic Party of Russia—LDPR] gets on the platform
and exclaims: Let there be four hours! Let there be even one hour! But
of truth! After which he dishes out the usual measure of vilification not
only to the VGTRK but also to the entire press, in which the most pungent
stream is the argument concerning dandruff and caries [reference to shampoo
and toothpaste advertising] threatening everything Russian, national and
so forth.
The argument, which in a
different situation might have seemed curious, sounded surprisingly convincing
in the context of the draft law under discussion—the point is that the
central point of the draft “on state support for and control of” the VGTRK
does not constitute support at all, but control. Anti-advertising invective
is merely an advertising ploy promoting the idea to introduce on Channel
2 very real agitprop of the type that existed on the CPSU Central Committee.
It will have an innocuous-sounding title—the Supervisory Council—and an
apparently lightweight status—public. But it immediately emerges
that society will be represented in the council not in the person of its
respected citizens but by the state in the plenipotentiary-punitive form
of its own appointees. Once again they will have agitprop powers,
even including the determination of personnel and programming policy, control
over financial activity and so forth.
Bid to control Russia TV is political
Why is all this needed?
Yes, the VGTRK has considerable problems. They include financial,
personnel and programming problems. But deputies’ sober voices, which
are saying that the funds being offered to solve these problems nullify
the noble aim and contradict the Russian Federation constitution and the
Law on the Mass Media, have been drowned out by Liberal Democratic demagogy.
And how! After all, it was not the people but . . . television which
drove the communists from power in 1991, it is this which is “slandering”
(Zhirinovskiy’s word) “entire historical periods,” for example the sixties
to eighties, when, surely you can see, unlike the Stalinist years there
were no more “mistakes.”. . .
“That is what we want to
stop,” the LDPR leader concluded his fiery speech by saying, letting it
be clearly known that the law on state control of the airwaves is needed
by the opposition not at all to combat corruption and the imaginary threat
of Russian television’ flotation but to achieve quite specific political
aims.
But the importance of what
has happened should not be exaggerated—the fuss over the law because of
its clear anticonstitutional nature will be just another farce in the LDPR’s
repertoire—although it sounds like the command to “face the front!”
‘Rossiyskiye Vesti,’ Moscow, January 16, 1998
V. Paper sees draft media laws as Duma’s “revenge.”
The draft laws “On Increasing
the Influence of the State on the All-Russia State Television and Radio
Broadcasting Company [VGTRK]” and “On Amendments and Additions to the Law
‘On the Mass Media,’” which have been given their first reading, are ostensibly
designed to protect media independence, but are in fact a form of revenge
on journalists by the Duma majority.
The draft laws which have
been given their first reading were perhaps the most serious attack on
the press in the entire period of overt and covert confrontation between
the media and the Duma. It is interesting that these draft laws were
supported by the overwhelming majority of deputies, moreover by many of
those who were actively against them only the day before.
The draft laws coming into
force could result in the total ruin of the Russia TV channel, which they
are trying to prohibit from showing advertisements, the impoverishment
or even closure of some daily newspapers (since the state will not take
it upon itself to finance them and will not provide concessions), and a
total lack of information about deputies’ activities (which, to be frank,
would be much easier for journalists than citing verbatim, as they are
obliged to do by the legislators, Duma members’ half-hour speeches).
But it is more likely that
the media will have to manoeuvre to protect themselves against the amendments.
The state channel could well sell time to advertisers or do its own reports
on Snickers, financial and industrial groups would sign over some of their
dailies to fictitious individuals, and parliamentary correspondents would
choose to cite legislators’ brief remarks in the lobby, which the legislators
would like even less.
The likelihood, however,
is that none of these things will take place since it is clear that neither
of these draft laws will get through the Federation Council and be signed
by the president. Most of the deputies realize this and, in voting
for the draft laws, were expressing their attitude towards the VGTRK in
particular and towards journalists in general, and specifically towards
the financial and industrial groups backing them.
As for relations between
the press and the Duma, there are no visible signs at the moment that this
weary struggle is going to end soon. The State Duma remains, perhaps,
the only state institution in Russia that has not got used to freedom of
expression in its present incarnation. Many Duma members still regard
journalists as mutinous servants of the Russian parliament rather than
as a necessary “evil” that objectively exists.
“Duma continues struggle against the press,” ‘Izvestiya,’ Moscow,
January 17, 1998
I. Tatarstan TV chief sacked for alleged political censorship.
The chairman of the republican
television and radio company, (Nail Khusnutdinov), was removed from his
position [on 11th February] during the 14th session of the State Council
of Tatarstan for an attempt at political censorship, it was announced by
Tatarstan President Mintimer Shaymiyev during the session.
The previous evening, while
watching the full recording of a relay from the State Council session,
the president noticed that a whole section had disappeared from his speech,
where he sharply criticized the work of both the State Council and the
government of Tatarstan.
Radio Russia, Moscow, February 11, 1998
II. Volgograd governor tightens grip on media.
Volgograd Governor Nikolai
Maksyut signed a decree on 22nd January which effectively limits public
subsidies to publications that are wholly or partially owned by the
regional authorities. The editor of the Oblast’s only independent newspaper
Inter, Yefim Shusterman, warned that the governor had given himself almost
complete control of the media before the next gubernatorial and legislative
elections. He complained that it will be difficult to compete in the “artificially
created” conditions.
Kommersant Daily, January 23, 1998
III. Nizhnii mayor rewards critics.
Acting Nizhnii Novgorod Mayor Vladimir Gorin sponsored a contest among local journalists to determine who had written or filmed the best critique of the city administration. The jury of 12 newspaper and TV editors considered 11 newspaper articles and 7 television broadcasts. The administration had threatened lawsuits against several of the journalists when their work had been published, but all cases turned out well for the reporters. Gorin sponsored the contest in hopes of building good relations with the media before the 29 March mayoral and oblast legislative elections. Gorin became acting mayor when Ivan Sklyarov was elected governor last year.
Izvestiya, January 22, 1998
I. Paper assesses VGTRK’s growing political clout.
The chairman of the All-Russia
State Television and Radio Company (VGTRK), Nikolay Svanidze, has survived
rumours of his downfall and transformed the company’s Russia TV channel
into a powerful political truncheon, says the Russian newspaper ‘Nezavisimaya
Gazeta.’ Russia TV’s news programme “Vesti” is now competing with
NTV news and achieves viewing ratings comparable with those of popular
TV series or entertainment programmes. Through its Radio Rossii Nostalzhi,
VGTRK is also targeting young audiences. The following are excerpts
from the ‘Nezavisimaya Gazeta’ report, headlined “The new political tele-truncheon:
VGTRK is ready for election wars”; subheadings added editorially:
According to every forecast,
VGTRK [All-Russia State Television and Radio Company] Chairman Nikolay
Svanidze was to be fired as far back as last autumn. Even his potential
successors were being mentioned, in particular, Igor Shabdurasulov, chief
of the information and culture department of the Russian Federation government.
Svanidze’s obvious affiliation with one of the political camps participating
in the struggle for redistribution of power became obvious even back then.
Nikolay Svanidze saved himself by gradually becoming more neutral.
However, there is every
reason to assume that this manoeuvre is only Svanidze’s own serious operation
aimed at diverting “well-wishers” towards the wrong object. While
the entire television crowd was dwelling on RTR’s [Russian Television and
Radio] imaginary problems, the company completely imperceptibly transformed
itself into a television channel ready to become a powerful political truncheon.
At this point, nobody is using this truncheon, including the state that
owns it. Nevertheless, the temptation to use such a mighty information
weapon and RTR for its intended purpose is too great to preclude others
trying. If there is a gun hanging on the wall, sooner or later it
has got to be fired.
Where does RTR’s growing
political influence come from? First, of course, coverage—its audience
is only slightly smaller than that of ORT [Russian Public Television].
Second, the obvious strengthening of political-television management at
RTR.
“Vesti” now competing with NTV news
The streamlining of the
new policy at the television channel is easy to detect. The formerly
weak and amorphous “Vesti” now realistically competes with NTV news, which
until now ruled supreme in information broadcasting. According to
Gallup Media data, “Vesti” reaches practically the same size audience in
Moscow as the popular television series “Santa Barbara.” In January,
in terms of audience reach, “Vesti” was ahead of numerous entertainment
programmes and films—which means that Russia TV viewers are extremely politicized
and as a constituency are of great interest to politicians.
“Vesti” increased its rating
first of all through such a simple measure as building a normal programming
structure, which now appears as follows: first political news, then the
economy, regions, and international events. In the past this priority
line-up was not observed, and frequently “Vesti” left the impression of
an information mishmash.
The changes that Russia
TV’s main news programme has undergone are not the only ones on the television
channel. Last October the daily programme “Details” was brought back.
Another innovation was the use of “Vesti’s” “trademark” at Radio Rossii.
Now the news at Radio Rossii, which is a part of the VGTRK structure, go
on the air with the same musical lead as “Vesti.” Some “Vesti” reports
are also used at Radio Rossii, which saves on financial and human resources.
The time allotted for political
broadcasting also was expanded by creating “News” on the “Culture” channel.
Now this channel broadcasts six programmes with the “Vesti” label a day.
This “News” segment has enabled the VGTRK to reach an audience that in
the past never watched such programmes at all. This is mainly the
humanities and scientific-technical intelligentsia.
VGTRK now targeting young audience
The VGTRK has found yet
another electoral reserve where nobody was looking for one. We are
talking here about a previously absolutely apolitical audience, whose maximum
age is 35-40 years (students, teenagers). This contingent is being
“worked over” through Radio Rossii—Nostalzhi, which broadcasts to 72 cities
in the country.
Overall, the substance of
the information innovations at the VGTRK can be expressed as follows: A
unified information space has been created for completely different audiences.
All the changes in the channel’s political broadcasting have been occurring
against the background of Russia TV obviously being uncompetitive in financial
terms compared to other television channels.
And the channel’s management
found an ingenious method to solve this problem by using the intellectual
elite vegetating in Moscow’s academic institutions. The effect exceeded
all expectations. . . . And the channel has acquired a fresh information
look.
‘Nezavisimaya Gazeta,’ Moscow, February 5, 1998
II. TV groups oppose on-screen “violence and sensuality.”
The Russian Federal Service
for Radio and Television, the National Association of TV Broadcasters,
the Russian Association of Regional Television Companies and the Union
of Journalists of Russia have made a joint statement on [2nd February]
on the content of television programmes.
It was pointed out that
recently, the Russian Federal Service for Radio and Television and other
bodies of the executive power had received many letters showing that a
considerable part of TV audiences do not accept programmes and films with
elements of violence and sensuality, which have been deeply rooted on TV
screens, in the evening, in particular. The opinion of TV audiences
objecting to sex and violence on TV was reflected in the Russian press.
“We live in Russia, the
country which is making a painful transition from the old way of life to
a new one, but we do not always take into account that sensuality and violence
shown on TV channels available to all worsen problems faced by our society,”
the statement said. “We do not call for censorship or administrative
pressure. We believe in the importance of accord, a dialogue leading
to reasonable self-regulation,” the statement said.
The authors of the statement
suggested that public hearings be held into complicated and pressing problems
facing the television community.
ITAR-TASS news agency (World Service), Moscow, February 2, 1998
III. Paper reviews recent political manoeuvres in TV.
The Moscow newspaper ‘Kommersant-Vlast’
on 27th January published an analysis of political moves in recent months
affecting the ORT [Russian Public Television], VGTRK [All-Russia State
Television and Radio Broadcasting Company] and NTV [Independent Television]
channels, and culminating on 15th January in Deputy Premier Vladimir Bulgak
being put in charge of the Russian media. The paper recalled the
“struggle for power” at ORT, which had culminated in victory for the faction
including Igor Shabdurasulov, press secretary to Prime Minister Viktor
Chernomyrdin, and Tatyana Dyachenko, daughter of President Boris Yeltsin.
The paper said Bulgak was also considering the “restructuring” of debts
owed by the TV companies. With a presidential election coming up
in 2000, having a “flexible” person like Bulgak in charge of Russia’s media
would be useful “not only for the TV channels but also for one of the presidential
candidates—for instance, Viktor Chernomyrdin,” of whom Bulgak was a long-standing
supporter, the paper concluded. Following is the text of the ‘Kommersant-Vlast’report;
subheadings added editorially:
[On 15th January], Deputy
Premier Vladimir Bulgak took charge of the Russian media. His very
first actions showed that the Russian TV companies are very lucky to have
this new patron.
Vladimir Bulgak started
carrying out his new duties with plenty of zeal. Last week, he met
the directors of the State Committee for the Press, the Federal Service
for Television and Radio Broadcasting (FSTR), the RIA-Novosti news agency,
ITAR-TASS and ‘Rossiyskaya Gazeta,’ as well as those of three TV channels:
ORT [Russian Public Television], VGTRK [All-Russia State Television and
Radio Broadcasting Company] and NTV [Independent Television].
The main outcome of the
meetings was this: Bulgak is ready for the most constructive dialogue with
the journalists. ORT and NTV could only dream about such a supervisor,
because before Bulgak the media were supervised by Anatoliy Chubays—not
for very long, but in a very tough and effective manner. ORT and
NTV will remember his period for a long time.
Power struggle at ORT
Chubays, as always, was
concerned with the most important things: power and money. The struggle
for power on Channel 1 [ORT] reached its high point shortly before New
Year. Its general storyline is well known. The newspapers wrote
extensively about it. Of all the contenders, two were mentioned in
particular: media supervisor Chubays and ORT supervisor [Boris] Berezovskiy.
In actual fact, there are
many more characters in this story. Remember that at the end of last
year an attempt was made to transform the ORT closed joint-stock company
into an open joint-stock company. The struggle centred around the
new ORT charter, which was to decide the question of power on the channel.
Of course, the ORT leadership
prepared a charter beneficial to itself. It established that shareholders
would decide all basic questions, not by a simple majority but by a specific
(two-thirds) majority. That is to say, the state did not get any
real power with its 51 per cent of stock. On any matter, it had to
look for support from other shareholders.
State interests in ORT were
to be upheld by Maksim Boyko, a member of the Chubays team, who at the
time was chief of the State Committee for the Management of State Property
and chairman of the Collegium of State Representatives at ORT, which comprised
such influential figures as Tatyana Dyachenko, [daughter of President Boris
Yeltsin and] adviser to the president; Sergey Yastrzhembskiy, presidential
press secretary; and Igor Shabdurasulov, press secretary to the prime minister.
Under a government decree
of 1st November 1997, these people are to work out, by a majority of votes,
a “single position” for the state for every shareholders’ meeting and for
every session of the ORT board of directors. Incidentally, this document
did not appear by chance. The fact is that, when ORT was still in
the making, some prudent person (to all appearances, Boris Berezovskiy)
planted in the incorporation capital structure a bomb that deprived the
state of control over the TV company even without any new charter.
Put simply, the state’s
controlling interest (51 per cent) was dispersed. The State Committee
for the Management of State Property received 46 per cent and then ITAR-TASS
and the Television Technical Centre state enterprise each got 3 per cent.
Thus it was enough to agree with the leadership of one of these structures
for any initiative by the State Committee for the Management of State Property
(say, at a shareholders’ meeting) to be blocked.
The government’s November
decree on the Collegium’s “single position” deprived this diabolical trap
of its power. There is reason to believe that the author of the “single
position” was Anatoliy Chubays.
But this was only a prologue
to the battle for control over ORT. The real struggle unfolded at
the first session of the Collegium of State Representatives, which took
place on 11th November. A “single position” on the new ORT charter
was being worked out. Two positions instantly emerged. Igor
Shabdurasulov fully supported the new charter. His logic, strange
as it might be, relied on general democratic values: “Why should the state
take part in controlling the press in the first place? Today there
is one state, one president, but tomorrow there is another. . . .”
[ellipsis as published]
Shabdurasulov was opposed
by Aleksandr Braverman—Boyko’s deputy—and Aleksey Kudrin, deputy finance
minister. They insisted that ORT is not a general democratic value;
ORT is a common joint-stock company in which the state owns a substantial
stake and so has the right to ensure its effective performance in its own,
quite material, interests.
Other speakers such as ITAR-TASS
head Vitaliy Ignatenko, Communications Minister Aleksandr Krupnov and others
were timid and verbose, but on the whole they backed Shabdurasulov.
It was only Yastrzhembskiy who made a diplomatic attempt to find a compromise
and reconcile the two sides.
Yeltsin’s daughter backs new ORT charter
The second-last to speak
was Tatyana Dyachenko. According to some participants in this historic
session, everybody was waiting for word from her because they “realized
what power was standing behind her.” Dyachenko spoke very softly
but was clearly summing up the results of the discussion, even though the
last to speak was Collegium Chairman Boyko. The president’s daughter
backed Shabdurasulov and the new ORT charter.
Boyko understood that he
would not get his way at that session. And so he proposed that work
on the charter continue and that the question be postponed. The tired officials
readily voted for that. Meanwhile, the struggle took an informal
course. Right after the Collegium session, Dyachenko and Boyko had
a long private conversation.
As a result, the meeting
of ORT shareholders did not discuss the new charter on 13th November: The
question was moved to the next meeting. Yet even at that stage the
outcome of the struggle for it was apparently clear to insiders, because
just before curtain-fall Boris Berezovskiy said: “By the next meeting many
of you will no longer be here.”
Indeed, Boyko was soon dismissed.
This year the Collegium
of State Representatives was headed by Vladimir Bulgak. The first
thing he said during his meeting with ORT Director-General Kseniya Ponomareva
was to promise that he would try to speed up the reorganization of ORT
into an open joint-stock company. Moreover, Bulgak assured [her]
that he disliked any conflicts and would try to settle the issue peacefully.
This means that he will probably share Shabdurasulov’s and Dyachenko’s
view.
[On] 20th January, talks
were held between new media supervisor Bulgak and old ORT supervisor Berezovskiy.
They met apparently by chance, at the celebration of NTV’s fourth anniversary.
Yet it looked very much as though Berezovskiy had come there precisely
in order to meet Bulgak. They spoke for a long time.
A constructive dialogue
had begun.
Financial problems of TV companies
Bulgak took an equally constructive
position also with respect to the financial problems of TV companies.
As ‘Kommersant’ wrote earlier, in the past two months the State Anti-Monopoly
Committee has tried to revoke NTV’s privilege to pay for the dissemination
of the TV signal at state rates. As a result, NTV’s expenses for
the “signal” could grow from 17m dollars in 1997 to 25-50m dollars in 1998.
As ‘Kommersant’ has found
out, the Anti-Monopoly Committee’s actions were preceded by an audit by
the Finance Ministry Control and Auditing Administration. Remember
that before the “writers’ case,” this department was headed by Chubays.
However, last week, at a
meeting with Igor Malashenko, the new media patron said that he thought
it was fair to establish uniform tariffs for all TV companies. True,
NTV finally resolved the problem without his assistance, because on the
following day [21st January] Boris Yeltsin signed an edict granting NTV
the status of an all-Russia TV company. And this meant precisely
that NTV has the right to pay for the “signal” at state rates. The
question was closed.
Thus, NTV, quite a profitable
company, has no more global problems to deal with. Its leadership
is left only to think about the TV company’ s development. Indeed, Bulgak
and Malashenko discussed the prospects for NTV’s satellite projects as
well as a few new ideas by the TV company. Some of them are a commercial
secret. But such a supervisor can be entrusted even with a secret.
Bulgak showed no less concern
about ORT’s and VGTRK’s finances.
Paper says TV companies’ revenues growing
‘Kommersant’ fact: According
to the Russian Association of Advertising Agencies, in 1996 ORT’s income
was 100m dollars, VGTRK’s was 67m dollars and NTV’s was 58m dollars.
In 1997, according to preliminary estimates by Russian monitoring companies,
the incomes were as follows: ORT, 120-130m dollars; VGTRK, 75-80m dollars,
and NTV, 100-110m dollars. Furthermore, the VGTRK revenues should
also include subsidies, which in the [first] eight months of 1997 alone
amounted to 312bn roubles (55m dollars).
Thus, the TV companies’
income is growing by the year. As for their expenditure, that is
still as opaque as ever, because it is a commercial secret.
However, even indirect data,
when put together, produce a very interesting picture. It is known
that NTV is a profitable company. So its expenditure does not exceed
100m dollars (according to some estimates, it is even half of that level).
ORT’s and VGTRK’s expenditure exceeds NTV’s mainly owing to the “signal,”
because they broadcast over a territory three times as large. And,
given that the “signal” costs NTV 17m dollars a year, even if the signal
for ORT and VGTRK costs three times as much, they can, on balance, “break
even.”
Furthermore, it is known
that ORT and VGTRK chronically underpay for the “signal.” According
to the Communications Ministry, as of early 1998 ORT owed communication
providers 366bn roubles (60m dollars) and VGTRK owed 673bn roubles (110m
dollars). Considering that the TV companies kept the money, it could
be presumed that they are profitable, but that their leadership is concealing
the profits.
Such speculation, however,
could go too far. It is clear enough that it is in the interests
of the state to straighten out the financial condition of both TV companies.
This should apparently have been done by the State Committee for the Management
of State Property, which in the last six months has been quite concerned
about the effective use of state property. It was evidently because
it was aware of this that ORT acted so aggressively to repulse Maksim Boyko’s
attempts to intervene in the company’s affairs.
Now, with the advent of
Vladimir Bulgak, ORT and VGTRK can sleep peacefully. Moreover, at his meeting
with Svanidze and Ponomareva the new media patron seriously discussed the
idea, which would have been absolutely impossible under Chubays.
Proposal to restructure TV companies’ debts
The idea is nothing short
of a sensation. It consists in restructuring the TV companies’ debts.
As is known, in the event of restructuring, a part of the debt is forgiven
while the rest is paid in instalments—moreover, without penalties or fines.
Of course, for the time
being it is still at the discussion stage. Having discussed the restructuring,
Svanidze promised Bulgak to work on cutting VGTRK’s production costs.
So perhaps the state will manage without giving gifts to TV.
True, all these calculations
are negligible next to the prospects that are opening up before TV in connection
with the 2000 presidential election. At that point the flexible supervisor
will be useful, not only for the TV channels but also for one of the presidential
candidates. For instance, Viktor Chernomyrdin.
Moreover, Bulgak has long
gambled on him, and he backed the right horse: He has been in the government
since 1992. Such supervisors live for a long time.
‘Kommersant-Vlast,’ Moscow, January 27, 1998
IV. Setting of joint radio and television company agreed.
The productivity of meetings
between Commonwealth heads of state is, it turns out, in inverse proportion
to the number of participants. Whereas the presidents of Belarus
and Russia succeeded during yesterday’s talks in resolving virtually all
the questions, the meeting of the “Four” was only partially crowned with
success. And the heads of the remaining CIS states made a total mess
of the summit of the “Twelve” scheduled for 23rd January. . . .
The decision of the Higher
Council of the Union of Belarus and Russia that has the most serious consequences
is undoubtedly the treaty on a joint Union television and radio broadcasting
organization. In the words of Sergey Yastrzhembskiy [the Russian
president’s press secretary], it is proposed that the new TV company should
be set up on principles of equal funding. Initially it will be funded
from national budgets, but in the long run it will be funded from the joint
budget. Alyaksandr Lukashenka, who has designs on the joint Russian-Belarusian
throne, is fully aware of the paramount influence of the electronic media
on the course of an election campaign. With the aid of television
he has achieved the impossible once already, defeating the “party of power”
in the Belarusian presidential elections. No wonder Lukashenka went
to the lengths of arresting ORT corespondent Pavel Sheremet and entering
into confrontation with Yeltsin: the loyalty of the leading Russian TV
channel to the Belarusian president was worth it.
“10 out of 10 for the ‘Two’; Six out of 10 for the ‘Four,’” ‘Novyye Izvestiya,’ Moscow, January 23, 1998
V. Alleged reasons for murder attempt on NTN-4 head given.
The recent attempt on the
life of Yakov London, president of the Novosibirsk NTN-4 television company,
is acquiring new details. According to information from sources close
to law enforcement authorities of Novosibirsk, an “ideological” version
of the incident is being worked up, inter alia. The point being that
not that long ago NTN-4 rebroadcast in Novosibirsk Martin Scorcese’s notorious
hit “The Last Temptation of Christ.” We should note that NTN-4 resolved
upon so bold a step two weeks before the NTV television company.
Noting the repercussions of the showing of the movie in Moscow, some observers
think it conceivable that local fundamentalists, who did not forgive the
head of NTN-4 such “religious pluralism,” could simply have “sorted out”
Mr London in Novosibirsk. This, though, is just one version, which
subsequently will be either corrected or discarded altogether.
Other versions are gradually
being revised also. Rumours that the head of NTN-4 was simultaneously
a high-level operative of the All-Russia State Television and Radio Broadcasting
Company have not been confirmed. As far as the “criminal underpinnings”
are concerned, experts who are well acquainted with this sector of the
television market maintain that neither Yakov London nor the company of
which he is in charge have had anything in common with criminal or semi-criminal
business.
Many people in Novosibirsk
regard the claims appearing from time to time that during last year’s oblast
council elections NTN-4 pushed some “kingpins” into power as a manifestation
of an unscrupulous competitive struggle. Nor have the rumours circulating
in the local press about the alleged purchase by the Video International
company of a controlling block of shares of NTN-4 been confirmed either.
In a word, all that concerns
this “celebrated” crime may thus far be characterized merely by the words
of Sherlock Holmes: “A confoundedly complicated business. . . .”
[ellipsis as published.]
“Has Yakov London ‘Drained the Cup’ for Martin Scorcese: The reason for the attempt on the life of the businessman could have been the NTN-4 channel’s showing of ‘The Last Temptation of Christ,’” ‘Segodnya,’ Moscow, January 16, 1998
VI. Paper views media mogul Gusinskiy’s business interests.
The Moscow newspaper ‘Sovetskaya
Rossiya’ on 15th January published a lengthy article on the origins and
interests of the Most Group headed by Vladimir Gusinskiy, focusing on the
media holdings of the group’s subsidiary Media-Most. Recalling the
recent clash between Gusinskiy’s NTV (Independent Television) channel and
the Patriarch of the Russian Orthodox Church over the channel’s screening
of a film allegedly offensive to Russian believers, the paper linked this
to what it called Gusinskiy’s links with prominent Russian Jewish figures.
The Most Group, the article said, “differs from other financial groups
in that it has extended its tentacles into many of the Russian mass media.
. . . No group can compare with Gusinskiy’s in terms of the breadth
of its interests in the mass media field.” It criticized the media controlled
by Gusinskiy for allegedly playing “a leading role in the propaganda campaign
against the national-patriotic forces, in the disparaging of our past and
the promotion of so-called ‘Western values,’ that is, the duping and moral
corruption of the Russians.” The following are excerpts from the ‘Sovetskaya
Rossiya’ report; subheadings added editorially:
Gusinskiy’s NTV in clash with Russian Orthodox Patriarch
[In] the evening of 9th
November 1997, the NTV [Independent Television] channel, which belongs
to Vladimir Gusinskiy, showed the feature film “The Last Temptation of
Christ” made by the American producer Martin Scorsese. It must be
said that this film met with a very mixed reception in the West and gave
rise to numerous public protests and an adverse official reaction from
the Vatican. Gusinskiy did this despite the resolute objections from the
leadership of the Russian Orthodox Church and the protest demonstrations
by Russian believers. Patriarch Aleksiy II of All Russia warned Gusinskiy
that showing this film would be sacrilege and would offend the feelings
of believers. But Gusinskiy did not heed that warning. The
patriarch considered it necessary to set forth again in public the position
of the Russian Orthodox Church after the film was shown. Addressing a press
conference at the Interfax agency on 1st December, Aleksiy II called NTV
a “spiritually alien phenomenon.” The channel, he said, “had crossed
the line dividing good and evil, ethical norms and permissiveness.”
The patriarch voiced the conviction that “the development of society in
a direction which makes it possible to offend people’s most fervent feelings
is a sign not of progress but of decline.” Aleksiy II urged the authorities
to display more concern for Russian citizens’” moral health.”
Paper outlines Gusinskiy’s links with Russian Jewish groups
It is surprising how Gusinskiy
could allow himself to ignore the opinion of Russia’s biggest religion—the
Orthodox Church. This can be explained if you consider that Gusinskiy
and the channel he controls—NTV—express the opinion of a religion which,
albeit less strong numerically, is nonetheless financially powerful.
Let us recall that Gusinskiy was one of the initiators and sponsors of
the unifying congress of the Russian Jewish Congress (REK) convened in
Moscow in January 1996. At the congress V. Gusinskiy was elected
REK president. Malkin, president of the Russian Credit Bank, Fridman,
chairman of the board of Alfa Bank and Khant, chairman of Most Bank, became
vice-presidents of REK. Boris Berezovskiy and Khodorkovskiy also
gave financial support to REK. Thus the congress’ sponsors included
at least half of Russia’s most influential financial oligarchs. Bill
Clinton and Boris Yeltsin sent greetings to the REK congress and Israeli
Ambassador Aliza Shenhar, a representative delegation from Israel and Moscow
Mayor Yuriy Luzhkov took part in its work. The idea of creating the
REK was lent impetus back in May 1995 at a meeting between Viktor Chernomyrdin
and a representative delegation of Jewish public and religious organizations
from the United States.
History of Gusinskiy’s Most Group
Moscow is Gusinskiy’s main
field of activity and the main sphere of his business interests. . . .
Gusinskiy’s hour of glory came with the advent of privatization, when Gusinskiy
entered the construction and property business. Acquiring contracts from
the Moscow authorities, he started to engage in the restoration of buildings
in central Moscow and the purchase of several plants for the production
of construction materials. In 1988 Gusinskiy created the Infeks consultancy
and information cooperative, which worked mainly for foreign clients.
In 1989 Infeks and the American legal firm Arnold and Potter created the
Most joint venture, in which Infeks owned half the incorporation capital.
In 1992 the Most enterprise was transformed into the Most Group limited
holding company and Most Bank became its financial centre. In all
the holding company includes over 50 enterprises employing over 15,000
workers and employees. . . . The financial centre of Gusinskiy’s
empire is Most Bank, founded in 1989. The bank’s sphere of interests
and field of activity is mainly Moscow, where it has 27 branches. . . .
Most Group’s media interests
The Most Group differs from
other financial groups in that it has extended its tentacles into many
of the Russian mass media. But no group can compare with Gusinskiy’s
in terms of the breadth of its interests in the mass media field.
In 1993 Most Bank founded the “independent” NTV channel. It owns
77 per cent of shares in NTV and the others are distributed among NTV employees.
Most Bank launched the “liberal” newspaper ‘Segodnya’ and bought the Ekho
Moskvy radio station. The Most Group also publishes the newspaper
‘Sem Dney’ and the weekly journal ‘Itogi’ which it publishes in conjunction
with the US weekly ‘Newsweek.’ In early 1997 all the mass media controlled
by the group were united in the independent Media-Most holding company,
headed by Gusinskiy himself, who abandoned the post of chairman of Most
Bank for the purpose. The holding company includes all the above
publications. Its sphere of influence also includes ‘Moskovskiy Komsomolets,’
‘Moskovskaya Pravda,’ ‘Vechernyaya Mosvka,’ ‘Kuranty,’ ‘Literaturnaya Gazeta’
and the MTK Moscow television channel. They are financed either directly
or through front structures.
In July 1997 Vyacheslav
Kostikov, the president’s former press secretary (1992-1994) and ambassador
to the Vatican, was appointed deputy director of Media-Most. At the
time of his appointment Kostikov said that he shares Gusinskiy’s political
views and believes him to be a “creative and inspired individual” (‘Moscow
Times,’ 4th July 1997). There is no doubt that Kostikov’s great experience
in manipulating public opinion could be useful to Gusinskiy, especially
in the period of the next presidential election campaign. According
to the journal ‘Kommersant’(18th February 1997) 70 per cent of shares in
the Media-Most holding company belong to Gusinskiy personally and its sponsors
also include the NTV and NTV Plus President Igor Malashenko and Vice-Presidents
Kiselev and Dobrodeyev. Gusinskiy-controlled media promote “Western
values.”
It may be said without exaggeration
that the mass media controlled by Gusinskiy play a leading role in the
propaganda campaign against the national-patriotic forces, in the disparaging
of our past and the promotion of so-called “Western values,” that is, the
duping and moral corruption of the Russians. In the West, Gusinskiy’s
information empire is extolled as a model of the “free press” and they
admire its propaganda of market ideology and its support for Chechen separatism
and any other separatism leading to Russia’s collapse. Gusinskiy’s
press and NTV played a leading role in Boris Yeltsin’s election campaign
and NTV President Igor Malashenko was officially included in his election
team. Gusinskiy spared neither efforts nor funds for Yeltsin’s victory
and was rewarded accordingly. In early 1997 the airtime for NTV was
increased considerably and this channel now broadcasts from the morning
until late into the night. Last year an NTV global project was implemented,
giving the opportunity for five-channel satellite television broadcasting,
the so-called NTV Plus. According to the holding company’s information,
by April last year the number of subscribers to this channel had reached
50,000.
Plans to expand media empire
Gusinskiy nurtures plans
for the further expansion of his information empire. But in observers’
opinion in 1997, after the return of Chubays and his team to the government,
Gusinskiy’s opportunities in the Kremlin and the “White House” were weakened
somewhat. It is this which is used to explain Gusinskiy’s failure
in his attempt to get control of the block of Svyazinvest shares.
As early as late 1996 and
early 1997 the Russian and world business press were writing that Most
Bank had been given exclusive rights in the sale planned by the government
of 25 per cent of shares in the state Svyazinvest-Rostelekom communications
conglomerate. London’s ‘Financial Times’ reported on 19th December
1996 that at first the government had had talks with the Italian telecommunications
company STET on selling it a 25 per cent package of Svyazinvest shares
for 1.4bn dollars. But the sides did not manage to agree on the terms.
The government decided to sell this tasty morsel to Russian banks and chose
Most Bank and Alfa Bank as the organizers of this operation and the preferred
customers. It was planned to offer Gusinskiy the package of 25 per
cent of the shares in Svyazinvest-Rostelekom for 1.2bn dollars, the ‘Financial
Times’ wrote.
With a view to mobilizing
the necessary funds, Gusinskiy decided to sell 40 per cent of NTV’s shares
to the Gazprom concern but to retain the controlling block. But these
plans were not destined to be implemented. The consortium joined
by the Most Group, Alfa Bank and Telefonica de Espana offered 1.71bn dollars
for a 25 per cent package of Svyazinvest shares at the July 1997 auction.
But a rival consortium headed by Potanin’s Uneximbank offered 1.875bn dollars
for the package and won the auction. Gusinskiy, using his ties in
the government, tried to secure a “replay” of the auction results.
He appealed directly to [Prime Minister] Viktor Chernomyrdin asking him
to intervene. The latter promised to “study” the situation, but his
intervention did not help. With Chubays’s support, Potanin eventually gained
the upper hand.
Interests in film production
In 1997 Gusinskiy “took
a liking” to the Mosfilm film studio. He offered Mosfilm 160m dollars
in investments in exchange for a package of 49 per cent of the shares in
the studio, which is on the list of establishments liable to privatization.
In addition to the investments, Media-Most offered the film studio 15m
dollars in the form of free credit to finance new films. Gusinskiy’s
interest in Mosfilm is understandable. The studio has premises worth
several times the sum offered by Media-Most. In addition the studio
has a unique library of Soviet films. The library has over 1,000
masterpieces of Soviet cinema including “Battleship Potemkin,” “Ivan the
Terrible,” “The Cranes are Flying” and many others. It is known that
the “market era” has not created any film of any importance. In the
past three years the 110 best Soviet films have been shown 10 times each
on various television channels! Mosfilm owns 80 per cent of these films.
The studio has the exclusive right to show its television films on all
Russian territory, in the CIS countries and the far abroad. The price
for showing an advertisement during the screening of Soviet films on television
is very high—30,000 dollars an hour. That is what Gusinskiy covets!
It should be noted that
during the New Year holiday, ORT [Russian Public TV] emphasized the screening
of Soviet films and the broadcasting of Soviet songs. As a result, according
to some polls, over 60 per cent of television viewers preferred that channel.
But NTV’s vulgar New Year show, which took the form of a meeting of intimate
acquaintances, attracted only 16 per cent of Russians. Whether the
television channel owners wanted it or not, the New Year air became a triumph
of Soviet musical culture and evidence of its enormous moral and artistic
superiority over the sterile pop market culture.
‘Sovetskaya Rossiya,’ Moscow, January 15, 1998
VII. New TNT station broadcasts through regional networks.
With the start of the new
year a newcomer has joined the television market. The TNT corporation,
founded by the Media-Most holding company, began broadcasting on 1st January.
Today, according to the new television company’s representatives, its programmes
can be seen by 30m people in 50 cities. To all appearances this rapid
growth in the customer base is due to the fact that TNT’s marketing policy
is based on cooperation with the major regional television stations: TNT
has already concluded 22 network agreements with local companies.
The use of digital technology
for signal transmission enables TNT to broadcast its programmes to the
regional companies in real time. Strictly speaking, this move is
not due to TNT’s “know-how.” The work of the STS (Television Station
Network) is based on similar principles. Meanwhile, it should be
noted that many of those who took part in the creation of the STS are now
employees of TNT. For example, Sergey Skvortsov, former general director
of STS, and Pavel Korchagin, his deputy, now hold similar posts with TNT.
But the fact that TNT is
something of a “derivative” of the STS is offset by the fact that the new
television company belongs to the NTV holding company. Consequently, with
TNT’s assistance the leading regional television companies are able to
show programmes and films bought and produced within this holding company’s
framework, at a convenient time for their clients. It is interesting
that you do not need any additional equipment to watch TNT’s programmes:
transmission is carried out via a conventional antenna. Admittedly,
this is true only for the regions—in the capital TNT is only broadcasting
on UHF at the moment.‘Segodnya,’ Moscow, January 14, 1998