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Home News Independent TV station to be sold to oligarch to comply with Russian law

Independent TV station to be sold to oligarch to comply with Russian law

Published on 25/09/2015

A leading Russian independent television company said Friday it had agreed to sell a 75 percent stake to Russian billionaire Alisher Usmanov as it rushes to comply with a law restricting foreign ownership.

CTC Media runs four entertainment channels on Russian television, which is largely dominated by state-owned media.

CTC said it agreed to the sale to ensure it complies with a controversial Russian law limiting foreign ownership of media companies to 20 percent.

Usmanov’s UTH holding made an offer to buy a controlling stake in the broadcaster in July, and CTC said Thursday that the $200 million (180 million euros) cash offer was the only viable proposal it had received.

The agreement includes bumping up UTH’s stake to 80 percent by January when the law’s provisions come into force.

The sale “will enable the management team to focus on the business, with the issue of compliance with the mass media law resolved,” CTC Media’s CEO Yuliana Slashcheva was quoted as saying in a statement.

The law was adopted last year in an atmosphere of increased distrust of the West fuelled by the Ukraine crisis, with lawmakers saying it was specifically designed to target independent media waging an “information war against Russia.”

While CTC’s channels are purely entertainment, it was caught up in law’s provisions as its majority shareholder had been Sweden’s Modern Times Group with a 38 percent stake.

The legislation is forcing international media groups to cede control of their Russian assets if not leave the once-booming market outright.

German publishing giant Axel Springer announced last week that it had sold all of its Russian assets including GEO, OK! and the Russian version of Forbes, to local publisher Alexander Fedotov.

CTC Media has created localised versions of popular Western sitcoms including “Ugly Betty” and “The Nanny” as well as making original shows.

Usmanov’s UTH holding owns U channel for women, MuzTV music channel and the localised Disney Channel. Usmanov is Russia’s third richest billionaire worth $13.3 billion according to Russian Forbes magazine.