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MOSCOW, April 3 -- A state-controlled company took over the NTV network today and installed its own management, signaling an end to the independence of the only major television news outlet outside the Kremlin's orbit.
Gazprom, the natural gas monopoly and NTV shareholder headed by an aide to President Vladimir Putin, ousted network founder Vladimir Gusinsky, replaced the station's general director and named the head of a government news service as the new editor in chief. The takeover culminates nearly a year of financial and legal battles over who will run the seven-year-old network that introduced Western-style news programming in Russia.
Also today, sources close to an investor group led by CNN founder Ted Turner said the group has concluded a deal with Gusinsky to buy out Gusinsky's holding company, Media-Most, for about $225 million. The holding company owns part of NTV as well as other media properties.
The takeover action by Gazprom provoked a defiant response at NTV headquarters, where journalists refused to submit to the new management and staged a dramatic on-air protest late into the night. The NTV logo at the bottom of the screen was circled in red and crossed with the word "PROTEST," while a host of reformist politicians and even former Soviet president Mikhail Gorbachev encouraged the reporters not to surrender.
More than 100 journalists and supporters, including members of parliament, hunkered down for the night to defend the network headquarters at the Ostankino broadcasting center against what they feared would be a post-midnight arrival of the new team to change the locks. Alfred Kokh, the new chairman of NTV, promised to avoid a confrontation that would "look like storming of a besieged fortress," but it was unclear how he planned to end the occupation.
The showdown overshadowed Putin's annual address to parliament, in which he declared a new era of stability in Russia after a decade of revolutionary changes. While promising market reforms, Putin mentioned democratic freedoms only in passing and made no reference to freedom of speech or NTV.
While at times used by Gusinsky as a political tool, NTV in recent years has built a reputation as the most professional broadcast news outlet in a country with little history of private news media. Its skeptical reports on the war in Chechnya and other topics have irritated the Kremlin.
NTV is a major part of the Media-Most empire of Gusinsky, who is in Spain fighting extradition to Russia on fraud charges that he says are politically motivated. Gusinsky has complained for nearly a year that he is the target of a pressure campaign orchestrated by the Kremlin.
"This is a turn back to the Soviet days," news director Gregory Kritchevsky said after Gazprom's move.
Leaders of today's action, however, insisted their motivations were strictly financial and promised not to interfere with editorial policy. Gazprom acted only as a major shareholder and creditor to protect its investment in NTV, they said.
"The real problem at NTV today is not freedom of speech," said Boris Jordan, a 34-year-old Russian American investment banker named the new general director. "It's the absolute financial collapse" of the network.
Gazprom made its move at an emergency shareholders meeting it called at its offices today. Yevgeny Kiselyov, NTV's general director and most famous anchor, showed up at Gazprom headquarters waving a court order blocking the meeting. But Gazprom lawyers then produced another decision from the same judge, issued just minutes earlier, reversing his own order. Kiselyov stormed out and later contrasted the unexplained flip-flop with Putin's call for judicial reform in his address today.
Gazprom owns 46 percent of NTV stock and put together a coalition with a small firm that owns 4.44 percent. With that 50.44 percent majority, it voted to replace the board of directors, including Gusinsky, and name Kokh as chairman. Although Kokh promised in January to keep Kiselyov on the board, he was removed along with Gusinsky.
The new board then voted to take away two of Kiselyov's other titles, naming Jordan as general director and Vladimir Kulistikov as editor in chief. Until today, Kulistikov was head of RIA, a government news service. Kiselyov had been named editor in chief by his staff just Monday night in a bid to keep him in case of a takeover.
The new leaders all have personal histories with the people they ousted. Kokh has publicly said he hates Gusinsky because of a dispute over the bitterly contested 1997 auction of a state telecommunications company. Jordan was a partner with the tycoon who beat Gusinsky in that auction. And Kulistikov worked at NTV until he was forced out last year because, he said, he thought Gusinsky ought to negotiate with Gazprom.
Jordan said the only real issue was Gusinsky's poor management of NTV, and he produced a slide show showing that the company is swimming in debt. He said his main task will be to stabilize the finances and then bring in an international investor to guarantee NTV's independence.
The Turner group, which also includes billionaire financier George Soros, will meet with Gazprom officials in Moscow next week to map out the direction of NTV, the sources said. The Turner purchase of Media-Most would mean that Turner becomes a major partner with Gazprom in the network.
Turner has vowed to maintain NTV's independence. Although he is vice chairman of AOL Time Warner and the company's largest single shareholder, he is acting independently of the company. Neither AOL Time Warner nor the AOL-owned CNN would have any involvement with NTV.
Turner's $225 million purchase price for Gusinsky's shares in Media-Most was lower than Turner's January offer of $300 million. The reduced price reflects "the difficulties experienced on the world media market in the past 60 days," according to one executive close to the negotiations. Turner and Gusinsky reached the agreement today just as Gazprom was making its move on NTV, the Turner sources said.
Jordan, the new NTV general director, said that if anyone tries to interfere in journalistic decisions at NTV, "I would immediately resign." He added that he hopes Kiselyov will stay on as host of his popular Sunday night show, "Itogi."
At NTV headquarters, Kiselyov's answer to his new bosses was clear as the journalists took to the airwaves in self-defense. Virtually all of the evening newscast was devoted to the situation and then followed by an extraordinary two-hour-plus live town meeting called "Russia Without NTV," featuring several hundred prominent politicians, journalists and even a priest and figure-skating coach.
"What is happening today is simple nonsense to me," Gorbachev said in a televised hookup from his office. "This humiliates us all, the citizens of Russia, to execute the channel this way in front of our eyes. . . . I think we must reject it decisively and say that it must not happen this way and we must defend this channel."
Others echoed the chorus. "Russia cannot live without NTV," said Boris Nemtsov, leader of the Union of Right Forces in parliament.
Grigory Yavlinsky, leader of the Yabloko party, compared it to the 1991 attempted Communist putsch against Gorbachev, calling the Gazprom action a "coup with the participation of foreign capital."
Staff writer Paul Farhi in Washington contributed to this report.
See also:
The original at http://www.washingtonpost.com/wp-dyn/articles/A32866-2001Apr3.html
NTV case
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