Strange Meeting With The President

Michael Hedges October 10, 2011 Follow on Twitter

It’s far from uncommon for politicians to call meetings with key media executives, particularly with elections on the horizon. It’s different in the UK, as we’ve seen, where Rupert Murdoch calls in the politicians. This meeting was a bit different, some witnesses calling it "strange."

Executives and shareholders of National Media Group (NMG), one of Russia’s biggest private sector media companies, met at the Kremlin and were addressed Russian President Dmitry Medvedev (October 6). In attendance were Bank Rossiya Chairman Yury Kovalchuk, steel and mining company Severstal Chairman Alexei Mordashov, oil and gas producer Surgutneftegaz CEO Vladimir Bogdanov and NMG CEO Alexander Ordzhonikidze. Also at the meeting were Investment AB Kinnevik Chairman Cristina Stenbeck, Modern Times Group (MTG) CEO Hans-Holger Albrecht and RTL Group CEO Gerhard Zeiler. All have shareholding, directly or indirectly, in NMG or television broadcaster CTC Media.

One the surface – and certainly in meeting’s opening for which reporters were invited – it was a public expression of solidarity between NMG and the Russian authorities. It was also a platform to reinforce the message that Russian authorities don’t meddle in media businesses and the country in open to more, similar, foreign investment. The Kommersant reporter (October 7) called it “strange.”

“Your cooperation,” said President Medvedev in opening remarks, “is an example of successful interaction between Russian investors, major Russian companies and foreign companies in a rather sensitive sector, because, let’s be honest, not every European country allows foreign shareholders into its media holdings and its television companies, as well as companies involved in information technologies. But we are an open nation, hence our position on the media. We believe this is the right approach.”

President Medvedev and Yury Kovalchuk, in what appeared to be well-orchestrated banter, got to the point. Interrupting, Mr. Kovalchuk said that in the early days the shareholders “had some very serious doubts and reservations. We were afraid of pressure from the State in terms of how and what we did.”

“And how did the government react?,” interrupted President Medvedev.

“This was a real concern for us,” reacted Mr. Kovalchuk. “Right now, I am not speaking about the issue of whether or not we agree with particular positions held by the television channel; I am speaking about business. For us, this would have been destructive to business. Now, I can say that the government did not interfere in this process in any way, which is extremely important for us.”

To the foreign investors, Mr. Kovalchuk noted that he and the other Russian investors “were entering an area of business we did not know, we did not have any background or professional training. So we initially envisioned our cooperation with professional international companies that had a wealth of experience in this field. In many countries this kind of cooperation in media assets, particularly electronic media, is frowned upon.”

“I’d like to say that you have selected good partners in RTL and MTG,” replied President Medvedev. “In this regard, it was the right choice.”

At the conclusion of the public part of the meeting, foreign shareholder representatives took turns reminding those listening that they will continue to be safe and in the minority.

“Russia has become a country of the utmost importance for us,” said Kinnevik Chairman Stenbeck, ”both for our company and our group’s investors.” Investment AB Kinnevik is a shareholder in Modern Times Group.

“Most importantly,” she continued, “I want to thank this administration for allowing this kind of partnership to come to fruition, and to enable and support this kind of foreign specialist relationship with world-class Russian partners like National Media Group. We are encouraged by the positive development that we see here on the wider media front, and we hope to be an active participant here in the future development, so thank you.”

“Today I can state that we are very happy with our decision to invest in 2005 and we are very, very happy with our partner, National Media Group,” said RTL’s Zeiler diplomatically . “We are a media company which likes to have local partners, because TV is about local products, it’s about local culture. And we have a saying: ‘We are Germans in Germany, we are French in France, and we want to be Russians in Russia.’ We are not the driver of the car here in Russia, but we are very happy sitting in the back of the car and watching Mr Kovalchuk steer the car, and sometimes, give our advice of our experience.”

The other Russian shareholders declined to comment, Mr. Kovalchuk being in charge and, notably, was able to arrange that nice room in the Kremlin. The private part of the meeting would certainly be “about the business.”

President Medvedev will be changing jobs soon. Presidential elections will be held next March and he recently, and unsurprisingly, endorsed Russian Prime Minister Vladmir Putin. Between now and then he will be heading “the list of United Russia for the State Duma elections in December,” said Mr. Putin, who also heads the United Russia party. Russia observers expect Mr. Putin, on his return to the presidency, to give particular emphasis to foreign investment.

But others see business as usual, with pressure on independent media “still on and getting tougher,” said a person aligned with foreign media investment in Russia. “ The United Russia party is asking local party representation to ‘deliver’ a 60% victory at the next election. Any thing under will be perceived as a failure. That means a decentralized mechanism on clamping down on any critical voices.”

See also in ftm Knowledge

Media in Russia

Media in Russia is big business and big politics. Media companies are consolidating as they move into new media and new territories. At the same time independence is still questioned. It's all changing. ftm looks at media in Russia and its neighbors, includes Resources, 124 pages. PDF file (January 2012)

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