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OTHER
MEDIA NEWS
I.
Scepticism over news reporting prevails.
An opinion poll by the Public Opinion Foundation shows
that 65 per cent of Russian residents watch television,
listen to radio and read newspapers for news every day. .
. . Twenty-six per cent do so at least several
times a week. And 5 per cent admit that they are
not interested in the news.
Many of those polled doubt that television, radio and the
press give them truthful and unbiased information.
For example, 56 per cent think that they do not get such
information on the country’s political life (while
30 per cent believe they do). Sixty-one per cent
doubt that economic reports are unbiased (while 26 per
cent believe they are). Forty-six per cent doubt
that “people’s views and public opinion on
various issues” are represented truthfully (while 40
per cent believe they are).
Finally, the effect of the mass media on people is far
from positive. Forty-nine per cent of those polled
believe that television, radio and the press have a
negative effect on people’s mood, while 32 per cent
believe their influence is positive.
‘Argumenty
i Fakty,’ Moscow, April 30, 1999
II.
Minister hails broadcasters’ charter.
The Russian government welcomes the initiative of the
country’s leading television companies and
Russia’s Federal Service for Television and Radio
Broadcasting [FSTR] to sign a charter of television
broadcasters, Russian Deputy Prime Minister Valentina
Matviyenko said at [the 28th April] ceremony.
By signing the charter, the television community has
proved that it can solve the problems of broadcasting
policy independently, Valentina Matviyenko observed. . .
. The position taken by the electronic media
determines a good deal the shaping of a normal social
climate. Society has many complaints about
television and radio broadcasting today. For
instance, she believes, there are complaints about
excessive brutality in the coverage of wars and
disasters, and these complaints are justified.
Often the language used on air is by no means literary,
and this is especially sad in a year when we celebrate
Pushkin’s bicentenary, she said.
At the same time, Valentina Matviyenko described as
“a serious error” the State Duma’s attempt
to introduce ethical principles of broadcasting by
mounting a legislative “cavalry attack.”
The fact that the leading television companies have
signed the television broadcasting charter is “the
best evidence that they understand correctly their duties
to society,” the deputy prime minister said.
ITAR-TASS
news agency (World Service), Moscow, April 28, 1999
III.
Yeltsin’s aide hails Russia’s press freedom.
Head of the Russian president’s administration
Aleksandr Voloshin [on 28th April] greeted on behalf of
the president those taking part in the ceremonial signing
of the television broadcasters’ charter, held at the
President Hotel. He said Boris Yeltsin had
intended to attend the event himself but was eventually
unable to come because of an extremely busy
schedule.
Aleksandr Voloshin described the signing of the charter
as “a new stage in the development of a civilized
mass media market in Russia.” He emphasized
that the free mass media were one of the major
achievements of Russian democracy.
ITAR-TASS
news agency (World Service), Moscow, April 28, 1999
IV.
Regional media face losing independence.
The Union of Journalists of Russia will render concrete
aid to the regional printed mass media, which are in
danger of losing their independence. The [28th
April] meeting of the union’s secretariat approved
some legal recommendations and a model statute for
editorial boards, which will give Russian journalists a
chance to resist the local administration’s massive
attempts to seize control over their publications.
These attempts boil down to the re-registration of the
mass media, the founders or co-founders of which include
different state structures, in order to turn them into
state-run or municipal enterprises under the pretext of
bringing them in line with the organizational-legal forms
stipulated by the Civil Code of the Russian
Federation. After such re-registration the
editorial boards will be guided in their work not by the
federal law on the mass media, but by the law on state
employees, which substantially narrows down the scope of
editorial freedom and independence. . . .
The recommendations, which the Union of Journalists has
drawn up jointly with the State Committee for the Press
and the Judicial Chamber for Informational Disputes,
include effective legal advice on how to avoid complete
dependence on officials, to ensure the freedom of speech
by lawful methods.
ITAR-TASS
news agency (World Service), Moscow, April 28, 1999
V.
Broadcasters’ charter lays down code of conduct.
A number of television and radio companies are . . .
planning to sign a charter of television and radio
broadcasters [on 28th April]. The head of the
Russian Federal Television and Radio Service [FSTR],
Mikhail Seslavinskiy, spoke about this to our radio
station in conversation with Sergey Buntman. He
believes that this document is really essential,
particularly in the run-up to parliamentary and
presidential elections.
[Seslavinskiy]
This is not a problem which has just arisen today, and
the actual idea of creating the document which is known
as the Charter of Television and Radio Broadcasters was
born exactly nine months ago.
[Buntman]
A symbolic period of time.
[Seslavinskiy]
A working group made up of representatives from the
leading television and radio companies met for the first
time in July 1998 and started to work out the text of
this document. I must be frank and say it was not a
simple process, but nevertheless, all broadcasters
acknowledge the fact that we work in such a fine and
delicate sphere that some sort of legislative or
normative acts cannot provide the standards for
regulation. Who is the judge? What can and
should not be shown? Where should the focus of a
camera be stopped? How close should it be permitted
to go and where is the point beyond which it is better
not to go? There are many such questions and it is
not possible to set up some sort of body, be it a state
body or some other sort of body—a supreme council of
ethics and morality as was proposed—which would say
that this definitely is permissible, and this is not
allowed. This problem is connected with a kind of
general feeling among television and radio broadcasters
who, after reaching agreement, can undertake to observe
certain voluntary norms. I think there is something
for everyone personally to think about.
The charter also establishes the principles, for example,
to do with obligations to strive for purity of the
Russian language. There have been instances when
presenters or guests have used inappropriate words, not
recognizing the fact that they are on air and are being
listened to.
[Buntman]
There are far more acute problems and television and
radio both seriously transgress in these ways.
These are the problems of unverified information, of
so-called dirty leaks, of compromising material, that is
to say tapes and [video] cassettes obtained from
surveillance, hidden cameras and so on. The
position of one’s journalist on one side of a
conflict, for example. Is this also included in the
Charter of Television and Radio Broadcasters, as I would
say that is more material than some things? Do you
agree?
[Seslavinskiy]
Without doubt, without doubt. These topics are
particularly topical this year, in 1999, when
parliamentary elections will take place and when many
television channels will need to find some sort of moral
way of behaving.
The principles concerning reliability of information are
fairly precisely formulated in the charter. Those
companies which will sign the charter will undertake to
make a clear distinction between reporting facts,
commentaries and assumptions and to avoid confusing
them. They will undertake to immediately correct
mistakes and inaccuracies made in reports. They
will undertake in all cases to not only criticize, but
offer an opportunity to reply to this criticism,
moreover, the form and time allocated to this must be
equal.
One of the most important principles is the undertaking
to publish only information received from reliable
sources.
[Presenter]
Seslavinskiy believes that public councils are the best
way to regulate television and radio broadcasters
today.
Ekho
Moskvy radio, Moscow, April 28, 1999
VI.
Trial of reporter suspected of espionage resumes in
Vladivostok. (See Interfax Report)
VII.
Duma fails to overturn Yeltsin’s veto on TV law.
The Russian State Duma failed on [21st April] to override
the veto of President Boris Yeltsin on the controversial
law on creation of a supreme council for moral standards
on TV, which the Kremlin said was an attempt to restore
censorship.
The president informed both chambers of the Russian
parliament that the law “contradicted the basics of
the Russian constitutional system and some federal
laws.”
The law gave the council for moral standards the right to
strip TV networks of licences, to examine TV programmes
and demand the sacking of TV heads.
“Such a body will not be created as it is about the
introduction of censorship,” a Kremlin official told
ITAR-TASS.
ITAR-TASS
news agency (World Service), Moscow, April 21, 1999
VIII.
Yeltsin to protect freedom of press. (See Interfax Report)
IX.
Agreement on Russian coverage of Tajik issues.
An agreement on the procedure for and conditions of
broadcasting of Russian TV-companies’ programs in
Tajikistan was signed within the framework of that
country’s president Emomali Rakhmonov’s visit
to Russia, RIA Novosti was told by a spokesman for the
Russian federal television and radio service, Andrei
Romanchenko.
The chairman of the committee for television and radio,
Saifullo Rakhimov, signed it on the Tajik side, and
Mikhail Seslavinsky, the federal service head, on the
Russian side. The agreement stipulates that
the “Russian side will ensure an objective coverage
of topical issues in Tajikistan by Russian TV companies
and radio-stations.” Tajikistan, in turn, will
“work out and implement the necessary organizational
and technical measures.” The Russian language
of the broadcasting was especially agreed upon.
RIA
news agency, Moscow, April 16, 1999
X.
Defence Ministry’s TV to strengthen
“patriotism.”
The problems of conversion of the radio-frequency
spectrum and the questions of licensing of TV channel 57
in UHF broadcasting by the Defence Ministry of the
Russian Federation were discussed at a meeting of
Russia’s Minister of Defence Igor Sergeyev and head
of the Federal Service of Russia for Television and Radio
Broadcasting (FSTR) Mikhail Seslavinsky, RIA-Novosti has
been told in the press service of the Russian Ministry of
Defence.
It is noted in the joint statement adopted on the basis
of results of the [15th April] meeting that the Ministry
of Defence regards with understanding the problem of
conversion of the radio-frequency spectrum and of the
necessity of [the] earliest release of frequencies for
the purposes of television and radio broadcasting.
The military department is prepared to maximally
intensify this field of work in 1999, meaning the
decimetre [UHF] range in Moscow and the Moscow
region. For its part, Russia’s Federal Service
for Television and Radio Broadcasting shows understanding
for the striving of the Ministry of Defence to organize a
television service of its own on channel 57 of the
decimetre range [UHF]. The concept of a new
television channel implies beginning of the work of a
military-patriotic channel oriented primarily to the
rising generation. At the same time, as the adopted
document says, both sides are well aware of the fact that
in conditions of a shortage of frequencies for the
purposes of television and radio broadcasting the issue
of a licence for the Defence Ministry’s broadcasting
must not prejudice the interests of the other potential
broadcasters who claim to start working on their own TV
channels. To these ends, the Ministry of
Defence and the Federal Service of Russia for Television
and Radio Broadcasting have agreed that the FSTR grants a
licence to the central television and radio broadcasting
studio of the Defence Ministry of the Russian Federation
for telecasting on TV channel 57 hors concours [without
tender], while the Ministry of Defence provides two
frequency bands in the decimetre range for organizing TV
broadcasting in Moscow and the Moscow region.
To make this process public the Ministry of Defence and
the FSTR of Russia will hold a meeting with the
interested TV broadcasting organizations in April
1999. Commenting on the results of the meeting,
Maj-Gen Shatalov, the head of the press service of
Russia’s Ministry of Defence and the press secretary
of the defence minister of Russia, said that the work to
organize TV broadcasting on UHF channel 57 is being done
on the initiative and under direction of Igor
Sergeyev.
According to him, the new TV channel will help more fully
cover the activity of the president and the government of
the Russian Federation and of the power structures to
ensure the country’s security and to strengthen
Russian statehood and patriotism. The new channel
will become one of the principal elements of the single
system for informing the public of the course of the
military reform and of the changes in the army and the
navy, which is being set up in the armed forces, the
major-general noted.
RIA
news agency, Moscow, April 16, 1999
XI.
Trial of reporter charged with high treason resumes in
Vladivostok. (See Interfax Report)
XII.
Duma adopts law on pornography. (See Interfax Report)
XIII.
Yeltsin decree on changes to TV and radio broadcasting.
Russian President Boris Yeltsin has signed a decree
“On amendment of decree No 2255 of the president of
the Russian Federation, dated 22nd December 1993,
‘On improving state management in the sphere of mass
information,’” ITAR-TASS learnt from the
Russian president’s press service [on 6th
April].
In accordance with the decree, a number of the functions
of the [former] Ministry of Press and Information will be
transferred to the Russian Federal Service for Television
and Radio Broadcasting. These functions are related
to ensuring implementation of state policy in the sphere
of activity of nationwide and regional state TV and radio
broadcasting organizations, licensing of TV and radio
broadcasting in the Russian Federation and the
registration of radio, TV, video and newsreel programmes
as mass media.
ITAR-TASS
news agency (World Service), Moscow, April 6, 1999
XIV.
Editor-in-chief of Russian newspaper reinstated.
(See Interfax Report)
XV.
Duma examining state TV and radio companies’ future.
The questions of legislative support of the further
development of the All-Russian State TV and Radio
Broadcasting Company (VGTRK) and regional TV and radio
broadcasting companies are being discussed at the
parliamentary hearings which began in the state Duma [on
6th April].
Opening the hearings, chairman of the Duma committee on
information policy and communications, Oleg Finko, noted
that the creation in 1998 of the state
“holding” of electronic media, comprising
broadcasting organizations and enterprises distributing
state TV and radio programmes, “meant a dramatic
strengthening of the state’s positions in the sphere
of TV and radio broadcasting as the main instrument of
the dialogue between the authorities and
society.” According to the deputy, all this
“was taking place against the background of the
active development of commercial information
‘holdings’.” The decree by president
Boris Yeltsin of 8th May 1998 “on improving the work
of state electronic media” and the government
resolution of 27th July 1998 “on forming a single
production-technological complex of state electronic
media (SPTC)” became real milestones on this way,
said Oleg Finko.
In his turn, VGTRK Chairman Mikhail Shvydkoy, who took
the floor, stressed that after adopting these two
documents “the process of transforming Russian TV
got under way and this process is still going
on.” He called a switch over to new
technologies in creating a single
production-technological complex of state electronic
media one of “acute problems.” Mikhail
Shvydkoy called the creation of a single technological
chain of production and distribution of TV programmes,
the settlement of artificially-created differences
between broadcasting companies and communication workers
and, as a consequence, the reduction of financial losses
the main assets of the SPTC. Among its assets he
also called coordination of the programme policy of both
federal media (TV channel “Russia,”
“Kultura,” radio channels “Russian
Radio,” “Mayak” (beacon),
“Orpheus,” “Voice of Russia” ) and
regional (92 regional TV and radio broadcasting companies
broadcast at least on one TV channel and one radio
channel), which, as Shvydkoy noted, makes it possible to
increase general influence on the audience (listeners),
make the reception of channels integral and organic and
minimize the costs by actively using the production base,
as well as the creation of a single TV and radio
fund.
Among other assets of the creation of the SPTC Mikhail
Shvydkoy also called the creation of a single information
space, the coordination of information policy by using
the RIA Vesti (Novosti) news agency as “a kind of
information tuning fork of the complex,” mutual
increase in the information flows of the federal and
regional levels. The VGTRK head stressed that
“the creation of the SPTC is of strategic importance
for the future of Russia as a federative democratic state
with the efficiently functioning economic structures of
all forms of property, primarily state
property.” Mikhail Shvydkoy also stressed that
the transitional period in restoring state TV and radio
broadcasting is being completed now. In this
connection, he called on the deputies of the state Duma
to treat most seriously the question of financing state
TV and radio broadcasting in forming the draft budget for
the year 2000.
RIA
news agency, Moscow, April 6, 1999
XVI.
Media’s Static Market.
By
Andrei Zolotov Jr.
The iron rations they must now subsist on have shrunk
Russia’s media companies, but there has only been
one major closure and little change in the sector’s
operating methods in the wake of the August crisis.
Patronage is still seen by many media firms as being of
much more importance than advertising or circulation as
the basis for a viable operation. The hardest-hit
sector-television-is also the most potent political
force, making it well-nigh inconceivable that any of the
major players would close down, no matter what their
financial situation. Meanwhile, as their bigger,
more glamorous brethren struggle, Russia’s print
media have been rousing themselves after a difficult
winter. Leaner and meaner, they are starting to
show signs of recovery. They are also prowling
around the nation’s political factions, eagerly
awaiting the cash that they are sure will come their way
closer to December’s State Duma vote.
TV
Wars
Russia’s broadcasters have been hit hardest by the
massive drop in advertising revenues caused by the August
crisis. At the two state-owned networks, this has
helped fuel attempts by Prime Minister Yevgeny Primakov
to assert government control over them. Meanwhile,
smaller players have been scraping around for fresh
financial and political backing.
The television industry was hit by a 70 percent to 80
percent drop in ad money post-August-and revenues had
been declining even before then. In the first half
of 1998, the three national television channels raked in
$ 300 million from advertising, according to Yury Zapol,
general director of ad giant Video International, which
sells commercial time on major national stations RTR and
NTV Independent Television, second-tier networks THT and
CTC and several radio stations. That amount was
significantly down from revenue projections, he added.
In the final four months of 1998-normally the peak
period, with sales equal to the whole of year-to-date
earnings-brought in at most $ 60 million, where $ 400
million had originally been expected.
Zapol’s predictions for 1999 advertising revenues
are 25 percent to 30 percent of the 1998 pre-crisis
expectations, which amounts to $ 150 million to $ 240
million. When asked to come up with a more precise
figure, Zapol said it was impossible. “Nobody
knows if we have lived through the last crisis or
not.” Nevertheless, none of the leading
television channels are expected to shut down, Zapol
said.
However, all of them are deeply in debt, forced to rely
on dirt-cheap programming based around endless reruns of
aging Soviet and Western films and Latin American soap
operas. Producers for the few programs still in
production regularly report delays in payment at best;
often their fees are added to the channels’ mounting
debts.
In such a drastic economic condition, there are at least
two possible sources of funds to keep operating:
foreign investment or the Russian government, whose head,
Primakov, has shown plenty of interest in guiding the
media.
At fully state-owned RTR, run by state management company
VGTRK, Primakov has placed former foreign intelligence
officers in sensitive positions. Lev Koshlyakov has
been appointed head of the Vesti news service, which runs
all the news reporting and programming units of VGTRK and
its network of correspondents in Russia and abroad.
Igor Amvrosov was appointed head of Radio Rossii-a
popular national radio station distributed to nearly
every home by the old Soviet system of radio wire that is
one of the few in today’s Russia to provide
extensive political reporting and cultural
programming.
But Primakov suffered a setback early this year when
attempts fell through at the last minute to make Yury
Kobaladze, former public-relations boss at the Russian
spy agency, deputy chairman in charge of news at
VGTRK. Even though VGTRK chairman Mikhail Shvydkoi
said that an order appointing the former spy to that post
had been prepared, Kobaladze ended up as the No. 2
man at state news agency Itar-Tass.
Despite this success in fighting off government
influence, VGTRK is in no real position to refuse the
government anything. RTR has traditionally been the
tool of whichever faction dominated the government of the
day, and the company’s dire financial straits leave
it little room to maneuver. VGTRK chairman Shvydkoi
has asked the government for an additional loan on top of
major tax and customs benefits granted to it last year as
part of the reform of VGTRK, decreed by President Boris
Yeltsin, that consolidates all the government’s
media assets into one conglomerate.
RTR-always the less profitable and more overtly political
of the two state channels-has therefore been moved
solidly into the prime minister’s orbit. But
Primakov is not stopping there in his quest for media
control.
“The government is becoming more and more of an
oligarch,” said Andrei Piontkovsky, head of the
Center for Strategic Studies. “It affects
every media empire.” The media empire that has
felt the government’s interest the most is Boris
Berezovsky’s. Financially hammered by the
crisis, his once-unshakable grip at ORT public television
has been all but pried loose.
Combining the capacity to reach 98 percent of the
population with a wealth of resources, a polished image
and presentation style, ORT is no mean prize in the runup
to the elections. The media giant has been
lingering on the verge of bankruptcy since last fall, and
the cash flows of Berezovsky and his fellow tycoons have
also suffered, making it impossible for them to pick up
the shortfall.
The ownership structure for ORT has long been
opaque. Theoretically, the government should have
always been in control of the broadcaster through its 51
percent stake. However, Berezovsky has combined his
own 11 percent stake, held through LogoVAZ, with a
stranglehold on the 38 percent held by a consortium of
private banks and the direct payment of salaries to top
managers to effectively control the company.
By the admission of ORT General Director Igor
Shabdurasulov, the company’s debts had topped $ 100
million by the start of this year.
The financial cracks in the Berezovsky empire gave his
enemies their opening and they seized on it with
alacrity. After a bankruptcy case brought by the
Moscow Bankruptcy Service over back taxes froze some of
ORT’s accounts-leading to a dramatic day when the
station said its poverty forced it to show its news
programs sans video footage-a Yeltsin-ordered credit line
of $ 100 million was set up. But the price was
high-14 percent of the company’s shares are to be
transferred to government-owned Vneshekonombank as
collateral for the bailout.
The Moscow Bankruptcy Service then withdrew its suit
after the Federal Bankruptcy Authority threatened to
revoke its Moscow counterpart’s license. But
the station’s bankruptcy woes did not end
there. A second case was filed by the producers of
“Chto? Gde? Kogda?” a popular, long-running
intellectual game show, over debts it claimed had reached
$ 34 million. The Moscow Arbitration Court imposed
“temporary supervision” on ORT and appointed
renowned lawyer Pyotr Chernovalov as outside manager to
oversee ORT’s operations until bankruptcy hearings
slated for April 20. Chernovalov rose to prominence
last year when he sued Inkombank, then one of
Russia’s biggest banks, for bankruptcy and
won.
In a dramatic broadcast on Jan. 29, Shabdurasulov,
the embattled general director, accused the government of
standing behind the bankruptcy case. “There is
a political game going on around ORT, or, to be more
precise, under -carpet intrigues in the corridors of
power,” he said.
As Berezovsky’s political and financial powers
declined, he turned to media magnate Rupert Murdoch in an
attempt to regain both revenue and an aura of
potency. In late December, ORT announced that
Berezovsky’s LogoVAZ and two national stations in
which it owned a stake, ORT and TV 6, were negotiating
with Murdoch’s News Corp. on the formation of
a joint advertising agency to sell airtime on the
television stations, taking over from the insolvent
Premier SV company of fallen political highflier Sergei
Lisovsky.
The announcement immediately generated largely
unsubstantiated reports that the Australian-born,
U.S.-based tycoon was in fact aiming not for the ad
agency, but for bits of ORT and TV 6. Late last
year, LogoVAZ and News Corp. formed a new company,
Logovaz News Corporation, which bought an FM radio
station in Moscow, Nashe Radio. Both LogoVAZ and
News Corp. remained tight -lipped about their
negotiations, which only served to multiply rumors that
Murdoch had his eye on ORT.
The prospect of the country’s biggest television
channel and key electoral campaigning asset slipping out
of the government’s hands threw much of the Duma
into a lather of indignation and legislation to limit the
sale of any of the state’s 51 percent stake in ORT
has already passed a first reading in the Duma.
Ironically, the law-which would require passage of
special enabling legislation before the sale of any of
the government’s shares-could derail the planned
rescue bid. The 14 percent stake in ORT to be
transferred to Vneshekonombank in return for the
Yeltsin-decreed line of credit is supposed to include a 7
percent block from the government stake, the other 7
percent coming from private shareholders.
The law may well be unnecessary anyway, as several
observers have said that Murdoch was only a cover for
Berezovsky, aimed at raising the stakes in his battle
with the government. Others said it would make no
sense for the magnate to get involved with a company that
has massive debts and whose ownership structure is so
unclear that the Duma has failed for two years to get a
copy of the company’s charter.
“All this talk about Murdoch is just smoke
screen,” Piontkovsky said. “Murdoch is
not so crazy as to go into such a nontransparent
structure and pay money without knowing to whom it is
going.” ORT has not been the only part of the
Berezovsky empire under attack-law enforcement services
have raided Sibneft oil company and Aeroflot, with top
executives linked to Berezovsky being fired from the
latter around the time of the raids. With his
commercial empire under siege, it has been vital for the
tycoon to maintain at least some levers of
influence. Media sources say that the color daily
Noviye Izvestia, reportedly launched with
Berezovsky’s support, was on the verge of closure
last fall, but that the financier made a last-minute
decision to keep the paper running, reducing
reporters’ salaries and limiting the distribution
network to cut costs.
The other paper in the Berezovsky stable, Nezavisimaya
Gazeta, has hardly been touched, and has been at the
forefront in reporting several investigations that
reflect poorly on major government figures-including the
investigations by Prosecutor General Yury Skuratov into
the FIMACO and Mabetex scandals.
Soft
Center
The difficulties that state-backed ORT and RTR have
experienced have been mirrored by Moscow Mayor Yury
Luzhkov’s chosen television vehicle, TV
Center. Launched in 1997 as a private corporation,
with 33 percent in the city’s hands and the
remaining 67 percent held by Vladimir Yevtushenkov’s
AFK Sistema holding company, TV Center spent hefty
amounts on trying to build up an effective national
presence, but failed to do so before the crisis gutted
both its revenue base and Moscow City Hall’s
capacity to pour large amounts of cash into its
coffers.
Even as Moscow struggles to maintain other flagship
projects-such as the ambitious City office and retail
development project and its support for ailing car
factories ZiL and Moskvich-City Hall’s media chief
Anatoly Lysenko is talking of the need for greater city
control and financing of the broadcaster.
Lysenko claims Luzhkov’s support for his desire to
turn the channel into a 100 percent city
enterprise. “I am not sure that (private)
shareholders would be able to finance the channel,”
Lysenko said. “In the period of crisis, the
state should assume responsibility for the media,”
he added.
However, a split between City Hall and Sistema-and
Yevtushenkov, long a friend and favored lieutenant of
Luzhkov-over TV Center seems unlikely. After all,
Sistema runs the rest of Luzhkov’s media empire,
which includes city newspapers Literaturnaya Gazeta,
Vechernyaya Moskva and Metro as well as national weekly
Rossiya and city radio stations Govorit Moskva, M-Radio
and Avtoradio. None of Sistema’s media
holdings have been especially profitable thus far.
Instead, the holding company’s lucrative banking and
telecommunications holdings have supplied the cash to run
mass media and other businesses in the sprawling holding
company.
While the media companies have failed to book major
profits, they have also yet to achieve the kind of
popularity that could translate into political potency,
hence Luzhkov’s delicate mating dance with
Russia’s most influential and commercially
successful media tycoon, Vladimir Gusinsky.
Gusinsky’s Media-MOST empire-which first grew strong
on the back of MOST -Bank’s strong city ties-has
been an island of stability in the recent crisis.
All of its outlets, from flagship NTV television to
Segodnya daily newspaper, have had to reduce costs, but
at the same time, no major projects have been
closed. In November, Media-MOST launched
Russia’s first privately owned, foreign-built
communication satellite, Bonum 1, which began digital
broadcasting of 17 channels for the holding’s NTV
Plus satellite pay -television project. The
Hughes-built satellite will cost $ 150 million by the
time the 10-year loan from U.S. Eximbank is repaid,
and an uplink station outside of Moscow has a $ 20
million price tag on it, a company spokesman said.
Gusinsky appears determined to keep the professional,
cost-efficient, three -layer system of television in
which the cost of programming would be spread among
broadcast VHF channel (NTV), second-tier UHF network
(THT), and DTH satellite service (NTV Plus). With
THT failing to meet company targets, Gusinsky even
earmarked funds to purchase the CTC network, which was
developed by U.S. media investor StoryFirst
Communications, CTC said. But the fastest -growing
regional network, which has U.S. backing as its
competitive advantage, preferred to align with Pyotr
Aven’s Alfa Group-one of the luckier survivors of
economic crisis-which bought 25 percent plus one stake in
CTC in the beginning of 1999, according to StoryFirst CEO
Peter Gerwe.
StoryFirst may also have balked at attaching itself to a
media empire with as much debt exposure as
Gusinsky’s. Setting up the NTV Plus network
has been expensive, and banking analysts were concerned
about Media-MOST backer MOST -Bank’s debts even
before the crisis. When things began to get tough
last year, Uneximbank’s threat to cut off a $ 30
million credit line to NTV-and the furious response to
the move that came from the MOST group-was an early sign
that Russia’s oligarchs were starting to run out of
cash. NTV has slashed salaries and expenditures,
and it also has the deep pockets of Gazprom-which owns a
30 percent stake in Media-MOST, to fall back on.
However, that may be insufficient, hence the resurrection
of an old political alliance between Gusinsky and
Luzhkov. Piontkovsky cited the manner in which NTV
anchor and shareholder Yevgeny Kiselyov gave Luzhkov a
series of softball pitches during a half-hour interview
on the Feb. 21 edition of the “Itogi”
analytical program as evidence that Gusinsky would
support Luzhkov’s political aspirations.
That alliance may be fueled by Media-MOST’s need for
help with its debts: In early March, MOST-Bank
approached the Bank of Moscow, owned by City Hall,
suggesting a merger. The Bank of Moscow has said it
was considering the alliance.
Pressing
On
Away from the world of electronic media, print media have
knuckled down in an effort to survive, many of them
hoping that the coming Duma and presidential elections
will provide a windfall.
One major reason the media system has weathered the
storms so well is that most of the leading financial and
industrial groups with media holdings saw the writing on
the wall well in advance and separated their media
holdings from the core companies to protect them from
heavy debt burdens.
“Everybody had been preparing for the crisis in
advance,” said Mikhail Kozhokin, chairman of the
board of Uneximbank’s Prof-Media holding and editor
of the Izvestia daily. “We did not know how
heavy it would become.
Maximum autonomy of single units within business empires
was the key to survival for Vladimir Potanin’s
Interros conglomerate, which formally separated from
Uneximbank in April 1998, as well as for other business
empires, many of which have media holdings, Kozhokin
said.
Despite the fact that most of the country’s major
banks have collapsed, none of the media management
companies have followed them. “They don’t
seem to have gross financial difficulties,” said
Andrei Richter, director of the Center for Law and Media
at Moscow State University. “Most likely funds
had been pumped from one part of the holding to
another.” Those of Moscow’s print
journalists still in work have mostly forgotten about the
dollar-denominated salaries of 1996 and 1997. But
the only title that has actually disappeared from the
newsstands of the Russian capital is Russky Telegraf-a
high-profile, low-circulation, elitist newspaper that was
launched by Potanin’s media empire in 1997.
Russky Telegraf was one of three elitist papers launched
at what, in retrospect, can be viewed as the crest of
Russia’s economic boom. Berezovsky helped
start Noviye Izvestia, and Moscow News publishing house
launched another “quality” newspaper, Vremya
MN, apparently with the backing of the Central
Bank. Though the exact budgets of these projects
were never made public, it is believed in Moscow’s
media circles that the oligarchs spent as much as $ 20
million apiece on such projects.
Similarly to Potanin’s other companies, which were
not dragged down along with nearly bankrupt Uneximbank
due to Interros’ separation from the bank, Prof
-Media lost Russky Telegraf but sees grounds for optimism
in its other holdings.
In September 1998, Prof-Media decided to merge Russky
Telegraf with its better -known title, Izvestia, which
Uneximbank and LUKoil took over from the paper’s
journalists in 1997, the same year Uneximbank bought a 20
percent stake in Komsomolskaya Pravda. “Man
proposes, oligarch disposes,” was the comment from
Russky Telegraf’s outgoing editor, Leonid Zlotin, at
the time of last year’s merger. He went on to
become deputy editor of Izvestia.
One prominent Izvestia reporter, who declined to be
identified, said that while the glory days of high money
and lax working conditions are perhaps gone forever, a
sense of stability has emerged.
“If in January the discussion was whether the
newspaper (Izvestia) would die, today we are discussing
what it is going to be like,” Izvestia editor
Kozhokin said. He said the paper broke even in
December, and in March he plans to expand it from eight
to 12 pages and separate business news and commentaries
into a financial section, Finansoviye Izvestia.
Kozhokin said that Komsomolskaya Pravda, which switched
to a tabloid format after years of driving in that
direction in terms of content, is doing well and started
to make a profit again.
Other publishing houses are at various stages of battling
the crisis, but none has been pushed out of the market
yet. Popular Moskovsky Komsomolets remains the
market leader in Moscow, running numerous editions around
the country and apparently losing fewer advertising
dollars than its competition. It also remains the
capital’s most independent newspaper, showing that
patronage is not the only route to media success.
Business daily Kommersant has also been showing signs
that its continued existence on the market may owe more
to advertising-sales success than strong patronage.
Having dropped any hope of selling the publishing house
to outside investors-at one stage it was asking $ 150
million before the crisis-the paper got thinner and
thinner late last year. But after a long “New
Year’s break” through mid-January, the paper
has come roaring back. In addition to a wave of
color supplements, the paper has been peppered with
full-page ads and has swelled back to reach the kind of
thickness it boasted before the crisis.
The newspaper is still apparently partly owned by the
remnants of Alexander Smolensky’s SBS-Agro empire,
and it was criticized for its soft coverage of
SBS-Agro’s default on thousands of individuals’
deposits.
With Kommersant and others having apparently stabilized,
and the polls offering a potential kick in earnings,
Russia’s media may well have succeeded in riding out
the storm-through a combination of cutting costs and
selling out more of their independence.
Although the upcoming political battles will clearly be
much less lucrative for Russian journalists than the
campaigns of 1993, 1995 or 1996, the print media’s
willingness to be used in political battles has been on
display several times this year. This has dashed
the hopes raised in some quarters that the crisis-by
breaking the ties between oligarchs and editors-would lay
the foundations for a freer Russian press.
A classic example was the willingness of numerous media
in early March to run spurious stories aimed at
discrediting First Deputy Prime Minister Yury
Maslyukov. Those stories fueled rumors Maslyukov
would be sacked, rumors that have so far proved to be
unfounded.
Richter of the Center for Law and Media is convinced that
journalists emerged from the crisis even less independent
than before.
With unemployment raging, they started “to think
more about what happens to them if they express their
personal opinion,” he said. At the same time,
with lower salaries, they are more likely to accept
offers to write or print zakazukha, or articles ordered
and paid for by businesses or politicians.
Argumenty i Fakty, Russia’s most popular national
weekly, brought the zakazukha issue blatantly into the
open last year when it announced that it would print
political articles for money, a move its management said
at the time was expected to become a major money-spinner
as campaigning for this year’s Duma elections kicks
off.
That means that what Russians read and watch has changed
little in the wake of the crisis.
“Freedom
of speech remains in a sense that one oligarch tells you
dirty things about the other in the morning, and the next
morning the latter slams the first one,” Piontkovsky
said. “And the closer to elections, the more
intense these wars will get.”
The
Moscow Times, March 30, 1999
XVII.
‘Kommersant’ fires editor for criticizing
Primakov.
“Kommersant-Daily” editor Raf Shakirov has lost
his job over an article on 24 March that was highly
critical of Prime Minister Yevgenii Primakov’s
decision to return to Moscow in mid-air (see
“RFE/RL Newsline,” 25 March 1999),
Russian Public Television reported on 25
March. According to Interfax, the newspaper
apologized for the article.—JAC
RFE/RL
Newsline Vol. 3, No. 60, Part I, March
26, 1999
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