Billionaires in broadcasting, the Eastern way

Michael Hedges October 15, 2007

More billionaires have been created in Eastern Europe since 1990 than you can put on a football pitch. Using good political connections to snap up State assets in those helter-skelter days Eastern businessmen took full advantage of the new free markets and became very rich. Some certainly like football and more than a few like media.

The Kyiv Post offered up two insightful articles this past week, one about Ukraine television channel NTN and the other about Eastern Europe’s billionaires. The stories relate in oh, so many ways.

InterMedia Group, so the story goes, bought 60% of television channel NTN earlier in the month. InterMedia Group already holds, by its own account, 60% of Inter Channel. Earlier InterMedia bought Prime Media Group, operator of television channels K1 and K2.

InterMedia Group is primarily owned by Valeriy Khoroshkovskiy (worth $1.1 billion estimated by Poland’s Wprost). Russia’s State broadcaster ORT owns 29% of InterMedia Group, the remaining 10% owned by Pegas Television. Khoroshkovskiy bought out in January the previous majority owner and company founder Dolovyi Svit (Business World), an economic development association.

This past August Kommersant Ukraine reported Khoroshkovskiy’s Ukrainian Media Project sold to Dmytro Firtash (worth $1.4 billion estimated by Kommersant Ukraine), previous owner of K1 and K2, and Vitaly Gayduk, until recently Ukraine’s State Secretary for Defense, for $600 million. Khoroshkovskiy became very angry at Kommersant Ukraine for this report and promptly sued, denying that anybody other than he is in charge at InterMedia. Mr. Firtash is a principal in RosUkrEnergo, the monopoly oil and gas importer. His major partner in that venture is Gazprom.

The drama that is Eastern European media takes its cast from quite interesting actors. We’d call them ‘colorful’ but that would imply they’re always visible, or that their colors stay the same. They do not. Some have carried ‘orange’ and some ‘blue.’ Some have changed.

Ukraine’s biggest billionaires also like media deals. The richest Ukrainian Rinat Akhmetov ($18.7 billion by Wprost estimate) is a bit media shy, figuratively and literally. He owns but a regional television station TRK Ukrayina and Russian language tabloid newspaper Segodnya (Today). He’s said to be very shy around journalists.

Number two is Igor Kolomoyskiy ($8.9 billion by Wprost estimate). He’s taken the body step into international big media by buying a stake in Central European Media Enterprises (CME) and joining their board. CME owns Studio 1+1, which Mr. Kolomoyskiy once said belonged to him. Apparently he and CME worked something out, just another little Eastern Europe media deal drama.

Viktor Pinchuk, number three ($7.5 billion by Wprost estimate), has extensive media holdings. The top circulation newspaper Fakty is his. So, too, are television channels Novy Kanal (New Channel), ICTB (International Commercial Television), the M1 music channel and STB.

But every part of this story is disputable. Ukraine’s billionaires regularly and consistently challenge reports of their wealth. Some, like Mr. Akhmetov, get rather grumpy. Questionable, too, are reports of who owns or controls media outlets. The Ukraine Helsinki Group investigated media ownership in 2006 and reported completely different results.

“Who knows?” began the famous last line of Joseph Conrad’s Lord Jim. Conrad was born Teodor Josef Konrad Korzeniowski in the Ukraine.