Russian President Vladimir Putin quoted Mark Twain in a meeting recently with the nation's top media chiefs, reassuring them that "reports about the death of press freedom are greatly exaggerated." Trouble is, the reports may soon prove to be all too true.
No sooner did CNN/Time Warner's Ted Turner publicly announce in early January that he was interested in buying a 25% stake in Russia's embattled NTV, the nation's only independent TV network, than the Kremlin appeared to ratchet up its efforts to take control of the Media-Most empire, which owns the channel.
On Jan. 17, the state-controlled Gazprom filed suit in a Moscow court, demanding the right to increase its stake in NTV to 65% from its current noncontrolling 46%. The suit is seen as part of an ongoing tussle over debts the media company owes the gas giant. But the suit was filed one day after the media group's finance chief, Anton Titov, was jailed by federal prosecutors. They're conducting a broad fraud investigation into the empire's founder, media tycoon Vladimir Gusinsky, who is fighting extradition from Spain. Meanwhile, the group's first deputy chief, Andrei Tsimailo, has fled Russia for London, where he is said to be hospitalized with a heart condition following several days of intensive questioning.
CRITICAL VOICE. This fresh bout of high-profile interrogations and raids on the media group has been seen as an attempt to scotch a deal that could have saved debt-ridden NTV from being taken over by the state. In a nation where television is regarded as the king of all media, having by far the most impact on public opinion, NTV is the only network in which the state doesn't yet have a controlling stake. And the channel has been one of the few critics of the Putin Administration.
In what could be the clearest sign yet that the Putin regime is intent on firmly controlling the media, The Wall Street Journal reported on Jan. 17 that the Kremlin had refused to provide guarantees to Turner that the channel would be free from political interference if it were bought by CNN/Time Warner. The Kremlin declined to comment on those reports. A spokesman for Media-Most, however, says the Kremlin's intentions had finally been unmasked.
Declared Dmitry Ostalsky, chief spokesman for the group: "The Kremlin has shown that all its talk of support for press freedom was sheer propaganda aimed at covering up the real actions of the authorities. By refusing to provide guarantees on the channel's freedom, it has clearly shown it had no intention of allowing the channel to be sold to a foreign investor from the start. It just wanted to take control."
BROKEN TRUCE. Media-Most's major creditor, Gazprom subsidiary Gazprom-Media, struck a debt deal last November to hand over 19% of NTV to Gazprom as collateral for loans it had guaranteed. Under the deal, neither Gazprom nor media baron Gusinsky would have retained a controlling stake in the company. Gazprom-Media had promised to find a foreign investor to purchase that 19%. For a while, it looked like a truce had been declared.
But now, while Gazprom seeks control in Moscow court, Media-Most has filed a legal challenge in a London court to dispute the November deal. It claims Gazprom-Media doesn't have the right to demand control of the stake when the loans covered by that amount haven't yet fallen due. The 19% stake, plus 25% of the rest of the group's media holdings, was to have covered a $260 million loan Media-Most owes Credit Suisse First Boston, guaranteed by Gazprom, that falls due in July of this year.
"Nobody has asked Gazprom to pay for this credit yet. There is no reason why it should have control of the stake," Ostalsky says. He hinted that Media-Most is in talks with other foreign financial institutions to find another creditor willing to provide funds to cover the loan when it matures.
That might be one of the last chances for Media-Most to fight off the Kremlin's increasingly aggressive tactics. So much for Putin's oft-heard declarations in support of press freedom. He may declare the attacks are a matter for law enforcers investigating independently. But it's beginning to look more and more like the they're being orchestrated from the top. The options for maintaining NTV's independence are running out. By Catherine Belton in Moscow