[CivilSoc] Financial Aspects of Death of Independent Russian TV

[Moderator]

The following item comes from RFE/RL Business Watch, Vol. 3, No. 24, 1 July
2003. Reprinted with permission. Copyright (c) 2003. RFE/RL, Inc. All rights
reserved.
FREE SPEECH, BAD DEBTS, AND OLIGARCHS
"Independent" is a fine word. "Independent cinema" eschews crass market
considerations, the "financially independent" are poised alluringly between
the toiling masses and the cigar-chomping fat cats, and the
"independent-minded" are bold and original.
[In Russian] NTV stands for "Independent Television." In the network's first
incarnation as part of Vladimir Gusinskii's Media-MOST conglomerate, it
basked in its moniker's warm glow. Privately owned and generally skeptical
of such Kremlin assertions as "the counterterrorist operation in Chechnya is
going particularly well this week," the channel enjoyed a faithful following
at home and near-iconic status abroad, where it was touted as the defender
of free speech at a time when the Western media still thought President
Putin's KGB past worth the occasional quizzical stare.
In April 2001, control over NTV shifted from Gusinskii to Gazprom-Media, a
branch of the state-controlled natural-gas monopolist. Gazprom-Media claimed
that its sole motivation was to make good on bad debts when it engineered a
4 a.m. takeover of NTV headquarters. Leading journalists at NTV accused the
state of trying to silence a voice of opposition, and many of them left the
station. Meanwhile, editorial pages all over the world mourned the passing
of independence from the Russian airwaves.
As it turns out, the end of NTV was only the beginning. Deposed NTV General
Director and anchor Yevgenii Kiselev gathered the remnants of his
journalistic team and led them to refuge at Boris Berezovskii's TV-6.
Independent broadcasting continued on a smaller scale at TV-6 until a
subsidiary of oil major LUKoil, a minority shareholder in the company that
held the channel's broadcast license, embroiled the network in a complex
bankruptcy suit that eventually proved lethal. Media Minister Mikhail Lesin
pulled the plug on TV-6 on the night of 22 January 2002.
Once again, some voices--fewer this time--bemoaned the end of "Russia's last
independent television network," while others--as numerous, and as official,
as before--chalked it all up to the vagaries of business. By 1 June 2002,
the anti-Kremlin veterans of NTV and TV6 were back on the air, this time as
part of an avowedly oligarchic project called TVS. Twelve 7.5 percent stakes
would be divided among as many oligarchs--including such celebrities as oil
tycoon and Chukotka Governor Roman Abramovich, privatization guru and
Unified Energy Systems head Anatolii Chubais, and aluminum magnate Oleg
Deripaska--and the remaining 10 percent would go the station's journalists.
The oligarchs promised to play fair with each other and the journalists . .
. the journalists accepted a non-commercial partner widely seen as a
political watchdog, and the latest and strangest variety of broadcast
independence was ready for primetime. A little more than a year later,
everything had gone horribly wrong--again. And at a touch past midnight on
22 June, TVS went off the air (in the middle of a commercial for Lays potato
chips, "Kommersant-Daily" reported the next day).
The latest closure of Russia's (third) last independent television station
drew correspondingly less outcry than the preceding two yanked plugs.
(Dubious indicator though it is, a google.com search on "last independent"
and NTV, TV6, and TVS produces, respectively, 224, 122, and 66 hits.) It
did, however, focus more attention on the financial aspects of independent
broadcasting in Russia.
According to "Kommersant," TVS gave up the ghost with debts of over $100
million, not to mention $6 million in unpaid salaries. A long article in
"Kommersant-Vlast" (No. 23, 16 June) detailed lackluster management and
chronic overspending at TVS, including $5 million to shoot a failed reprise
of a reality show that had initially cost $1 million to produce. TVS burned
through a $46 million loan from Vneshekonombank in half a year, and kept on
going--all the while pulling in a meager $2-3 million a month in advertising
revenues.
A 23 June postmortem in "Vedomosti," the editors of which have not hesitated
to criticize Kremlin media policy on other occasions, focused primarily on
the station's financial flop. After noting that a successor could emerge
from the wreckage of TVS, perhaps even with the old NTV team still in place,
the editors examined the "failed attempt by a group of businessmen to save
freedom of speech on a lone federal television channel" and drew a grim
conclusion about "the inability of our big business to create successful
enterprises in non-raw materials sectors of the economy."
This is not to imply that the tenor of coverage was not at issue in the
remaking of NTV and the closures of TV6 and TVS. Their coverage of events
was far more critical than the tame fare on state-controlled networks (which
have sunk slowly and inexorably over the last two years into a seemingly
endless rut of frozen-smile Putiniana). For all his self-importance,
sniffling delivery, and pompous locutions, Kiselev was and is a genuine
gadfly of the sort that does a body politic good; and satirist Viktor
Shenderovich is, at his barbed best, simply one of the best things on TV in
Russia.
What is striking, in retrospect, is that the fate of "independent"
television--with its avowed support for Western values and its rejection of
the Byzantine element in post-Soviet politics and business--should depend so
entirely on some of the more dubious aspects of oligarchic capitalism.
Though he won admirers in the West for the professionalism of his media
outlets, Gusinskii does not appear to have been a particularly adept
businessman. Similarly, Berezovskii's ambiguous accomplishments and
subsequent difficulties lie in a sphere that only partly overlaps with the
traditional understanding of business. Finally, the covey of quarrelsome
oligarchs who sponsored TVS seemed more interested in one-upping each other
than in proving that they can implement an effective business model outside
of electrical energy, fossil fuels, or metallurgy.
Shenderovich told "Moskovskie novosti" on 24 June that the end of TVS "is
just the death certificate for a person who was mortally wounded two years
ago. After that, hospitals and rest homes. We hung on for another year. For
me, the justification for the compromise that we made was the opportunity to
work for Russia rather than for Brighton [Beach] and Jerusalem. Even the
chance to do the show after Nord-Ost justified this compromise."
Shenderovich might be right. The program he put together after the bloody
hostage crisis in October 2002 was bitter, brave, and brilliant--the
antithesis of everything that "state-controlled" has ever stood for in
television. Still, the compromise was real, part and parcel of the financial
murk that entwined the end of TVS. After the third demise of Russia's only
independent television station, observers might be forgiven for broadening
their focus beyond the indisputably important question of free speech to the
equally crucial question of the business practices that make it possible (or
impossible) to broadcast that speech to a wider audience.
"RFE/RL Business Watch" is edited by Daniel Kimmage (DK). It is distributed
every Tuesday.
Direct comments to the author by email at d.kimmage at verizon.net.