Publication: Monitor Volume: 6 Issue: 151

A top Kremlin official has confirmed that Gazprom, Russia’s natural gas monopoly, is negotiating to take over Media-Most, the media empire founded and headed by Vladimir Gusinsky. Vladislav Surkov, a deputy presidential administration chief, told the New York Times that talks between Gazprom and Media-Most were “already drawing to close.” Media-Most is more than US$300 million in debt to Gazprom, which guaranteed several large loans to the media holding in return for large packets of Media-Most shares as collateral. Gazprom already directly owns 14 percent of Media-Most. Surkov said it was “possible that in exchange for these debts the entire holding will be transferred to Gazprom.” The state owns 38 percent of Gazprom. Another top Kremlin administration official, Dmitri Medvedev, recently became chairman of the natural gas giant’s board. Thus if Media-Most were to be sold off to Gazprom, it would mean de facto state control. The newspaper said that Media-Most had denied it was negotiating exclusively with Gazprom (New York Times, August 3).

Another Western newspaper reported earlier that investment bankers were set this week to begin valuing Media-Most. An anonymous Media-Most executive was quoted as denying that the holding had agreed to sell out to Gazprom and as asserting that talks were continuing with eight to ten potential strategic investors. Media-Most says that it is worth more than US$2 billion. Gazprom reportedly assesses it at US$750 million (Financial Times, August 1). The newspaper Kommersant, which belongs to the rival media empire controlled by Boris Berezovsky, reported earlier this week that Alfred Kokh, who heads Gazprom’s media arm, met on July 31 with Andrei Tsimailo, Gusinsky’s deputy. Tsimailo reportedly countered Kokh’s offer of US$100 million with a request for US$350 million (Kommersant, August 1).

Some Media-Most officials have accused the government of creating problems partly to lower the holding’s value. Gusinsky was arrested and briefly jailed earlier this year after the Prosecutor General’s Office began a criminal investigation for his alleged embezzlement of at least US$10 million in state funds back in 1997. Last week, the criminal case was suddenly dropped and Gusinsky left Russia to visit his family Spain. This gave rise to wise speculation that he had cut a deal with the authorities either to give up his media holding or NTV, its flagship television channel, or to tone down his media holdings’ criticism of President Vladimir Putin and Kremlin policy in general. Yevgeny Kiselev, NTV’s general director, has helped feed the speculation that the ownership of Media-Most is destined to change hands. Kiselev, who also hosts “Itogi,” NTV’s weekly news analysis program, concluded the program’s July 30 edition, the last before the program’s summer break, by indicating that NTV would continue its critical coverage of the news as long as it maintained “the same main shareholder” and the same management team (Moscow Times, August 2).