Gazprom-Media said Thursday that it was about to buy a controlling stake in Izvestia, one of the country's largest and most respected national newspapers, in a move that would expand state control of media beyond television.
Gazprom-Media general director Nikolai Senkevich made the announcement on Ekho Moskvy radio, saying that the deal to buy the stake from Prof-Media, the media holding in Vladimir Potanin's sprawling Interros business empire, would be completed "in the near future."
"Negotiations on this issue are close to completion and we will officially announce the deal in the next few days," Gazprom-Media spokesman Anton Sergeyev said later on Thursday, Interfax reported.
Prof-Media spokesman Konstantin Vorontsov confirmed that the transaction would happen in "the foreseeable future."
Under the deal, Gazprom-Media, an arm of the state-controlled natural gas monopoly Gazprom, would buy Prof-Media's 50.18 percent stake in the paper, he said.
With a registered print run of 234,500 copies, Izvestia is one of the country's three leading quality dailies. But unlike the other two -- Kommersant and Vedomosti -- it targets the general public rather than a specifically business-oriented audience.
Earlier this year, Izvestia began printing in color and issued a thick 48-page weekend paper on Fridays, featuring celebrity interviews and music, film and book reviews in an effort to expand the readership and attract younger readers.
Several analysts said that the deal was politically motivated and predicted that Izvestia, which has remained largely unbiased in its political coverage, would tone down any criticism of the Kremlin and become increasingly loyal to President Vladimir Putin.
Izvestia's graphic coverage of the attack on Beslan last September was widely seen as being behind the departure of editor Raf Shakirov, who resigned two days after the newspaper published a special edition dedicated to the crisis. Staff said the paper had received an angry call from the Kremlin.
Anna Kachkayeva, a media analyst with Radio Free Europe, said the sale of Izvestia was "the sort of deal that the seller cannot refuse."
"A decision has been made at the top that Prof-Media has to sell [Izvestia] and Gazprom-Media has put this decision into practice," Kachkayeva said.
Yury Korgunyuk, editor of the Partinfo political weekly, said Gazprom-Media's purchase of Izvestia was aimed at spreading the state's control of the media. "No doubt it was done on the request of the Kremlin," he said.
Kachkayeva and Korgunyuk praised Izvestia for offering unbiased coverage.
"It was cautious, but it reported stories in a way that allowed a clash of views and has never failed to report events that could be unpleasant for the authorities," Kachkayeva said.
"Knowing how Gazprom-Media has managed NTV, I assume that it could well have a sluggish, inactive and unformulated attitude toward this quite successful publication," she said. "It will have less influence; it will be accommodating toward the authorities, and quiet."
Gazprom took over the famously critical NTV television channel from Vladimir Gusinsky, contending that it was trying to recover Gusinsky's considerable debts.
After the takeover, NTV's coverage came closer into line with that of Channel One and Rossia, the two main national, state-owned television channels.
"They will more often publish interviews with the people who express loyalty to the Kremlin," Korgunyuk said, referring to Izvestia under Gazprom-Media. "It will be neutralized and sterilized. Gazprom-Media is used as a cage for the media, so that they don't break loose and run away."
Andrei Grigoryev, editor of Kompaniya magazine, suggested that Potanin could be handing over control of Izvestia as a sign of loyalty to President Vladimir Putin, Vedomosti reported.
Potanin has been careful to distance himself from the more confrontational style of fellow billionaire Mikhail Khodorkovsky.
Dmitry Badovsky, a domestic policy expert at Moscow State University's Institute for the Research of Social Systems, said it made economic sense for Gazprom-Media to buy Izvestia. With NTV television and Ekho Moskvy radio in its control, the company lacked only a quality newspaper with a national reach to complete the range of its holdings, he said. It also made sense for Potanin to sell the asset, he said.
Izvestia made a loss last year and its value dropped by $1 million, said Oleg Solomentsev, head of corporate relations at the asset management company Menedzhment Tsentr. Menedzhment Tsentr owns an investment fund that manages 38 percent of Izvestia, he said.
With a weak financial footing, Izvestia is useless for Potanin, Badovsky said, particularly as it cannot be used a tool to influence the Kremlin.
Georgy Bovt, editor of Profil magazine and a former managing editor at Izvestia, speculated that Potanin would be relieved to sell Izvestia after probably having to listen to complaints from officials offended by Izvestia reports.
"I am glad for Potanin. He's had enough torture," Bovt said. "Imagine you are Potanin and you are sitting and counting your profits from selling nickel and all of a sudden you get calls from [St. Petersburg Governor Valentina] Matviyenko, [Emergency Situations Minister Sergei] Shoigu, [former Nuclear Power Minister Yevgeny] Adamov, the presidential administration and they all complain about Izvestia. Your life turns into a nightmare."
Potanin's other well-known newspaper, the tabloid daily Komsomolskaya Pravda, brings in more money than Izvestia, Badovsky said.
Senkevich denied media reports that predicted a change of editor at Izvestia after the purchase, Ekho Moskvy said.
In response to speculation Thursday, Sergeyev, the Gazprom spokesman, said that there were no plans to make Oleg Kuzin, the editor of the Gazprom-owned newspaper Tribuna, the editor of Izvestia. "Tribuna underwent a lot of positive changes under Kuzin, and it doesn't make sense to appoint anyone else there," he said, Interfax reported.
Kuzin could not be reached for comment Thursday, and his secretary, who did not give her name, said, "Oleg Sergeyevich has firmly said that he is not giving any comments today."
Boris Reznik, a member of the State Duma's Information Policy Committee, said Izvestia's current editor, Vladimir Borodin, was not "the worst option" because he was in favor of unbiased coverage.
Badovsky, however, said he was sure that Borodin would prove to be an interim figure and would be replaced. He speculated that Gazprom-Media would want to give the job to a well-known professional and said he had heard that Vitaly Tretyakov, a former editor of Nezavisimaya Gazeta, was a possible candidate.
Prof-Media and Gazprom-Media did not disclose the price of the deal, but media publishers polled by Vedomosti said it would most likely be between $10 million and $20 million. Potanin paid $40 million when he bought the stake the 1990s, Bovt said.
As Gazprom-Media announced the deal on Thursday, Hermitage Capital, one of the country's top foreign investment funds, released a report accusing Gazprom of wasteful spending on noncore activities. The fund said it wanted to know why the gas giant was spending a large percentage of its staff costs on noncore businesses from media to porcelain to poultry.
Gazprom paid $1.5 billion in salaries in 2004 to 120,000 staff working in noncore businesses, which, the report said, brought the gas giant losses of $276 million.
On Wednesday, Gazprom warned that its losses on gas sales in Russia would rise over fivefold in 2005 to about $1 billion.
Gazprom-Media general director Nikolai Senkevich made the announcement on Ekho Moskvy radio, saying that the deal to buy the stake from Prof-Media, the media holding in Vladimir Potanin's sprawling Interros business empire, would be completed "in the near future."
"Negotiations on this issue are close to completion and we will officially announce the deal in the next few days," Gazprom-Media spokesman Anton Sergeyev said later on Thursday, Interfax reported.
Prof-Media spokesman Konstantin Vorontsov confirmed that the transaction would happen in "the foreseeable future."
Under the deal, Gazprom-Media, an arm of the state-controlled natural gas monopoly Gazprom, would buy Prof-Media's 50.18 percent stake in the paper, he said.
With a registered print run of 234,500 copies, Izvestia is one of the country's three leading quality dailies. But unlike the other two -- Kommersant and Vedomosti -- it targets the general public rather than a specifically business-oriented audience.
Earlier this year, Izvestia began printing in color and issued a thick 48-page weekend paper on Fridays, featuring celebrity interviews and music, film and book reviews in an effort to expand the readership and attract younger readers.
Several analysts said that the deal was politically motivated and predicted that Izvestia, which has remained largely unbiased in its political coverage, would tone down any criticism of the Kremlin and become increasingly loyal to President Vladimir Putin.
Izvestia's graphic coverage of the attack on Beslan last September was widely seen as being behind the departure of editor Raf Shakirov, who resigned two days after the newspaper published a special edition dedicated to the crisis. Staff said the paper had received an angry call from the Kremlin.
Anna Kachkayeva, a media analyst with Radio Free Europe, said the sale of Izvestia was "the sort of deal that the seller cannot refuse."
"A decision has been made at the top that Prof-Media has to sell [Izvestia] and Gazprom-Media has put this decision into practice," Kachkayeva said.
Yury Korgunyuk, editor of the Partinfo political weekly, said Gazprom-Media's purchase of Izvestia was aimed at spreading the state's control of the media. "No doubt it was done on the request of the Kremlin," he said.
Kachkayeva and Korgunyuk praised Izvestia for offering unbiased coverage.
"It was cautious, but it reported stories in a way that allowed a clash of views and has never failed to report events that could be unpleasant for the authorities," Kachkayeva said.
"Knowing how Gazprom-Media has managed NTV, I assume that it could well have a sluggish, inactive and unformulated attitude toward this quite successful publication," she said. "It will have less influence; it will be accommodating toward the authorities, and quiet."
Gazprom took over the famously critical NTV television channel from Vladimir Gusinsky, contending that it was trying to recover Gusinsky's considerable debts.
After the takeover, NTV's coverage came closer into line with that of Channel One and Rossia, the two main national, state-owned television channels.
"They will more often publish interviews with the people who express loyalty to the Kremlin," Korgunyuk said, referring to Izvestia under Gazprom-Media. "It will be neutralized and sterilized. Gazprom-Media is used as a cage for the media, so that they don't break loose and run away."
Andrei Grigoryev, editor of Kompaniya magazine, suggested that Potanin could be handing over control of Izvestia as a sign of loyalty to President Vladimir Putin, Vedomosti reported.
Potanin has been careful to distance himself from the more confrontational style of fellow billionaire Mikhail Khodorkovsky.
Dmitry Badovsky, a domestic policy expert at Moscow State University's Institute for the Research of Social Systems, said it made economic sense for Gazprom-Media to buy Izvestia. With NTV television and Ekho Moskvy radio in its control, the company lacked only a quality newspaper with a national reach to complete the range of its holdings, he said. It also made sense for Potanin to sell the asset, he said.
Izvestia made a loss last year and its value dropped by $1 million, said Oleg Solomentsev, head of corporate relations at the asset management company Menedzhment Tsentr. Menedzhment Tsentr owns an investment fund that manages 38 percent of Izvestia, he said.
With a weak financial footing, Izvestia is useless for Potanin, Badovsky said, particularly as it cannot be used a tool to influence the Kremlin.
Georgy Bovt, editor of Profil magazine and a former managing editor at Izvestia, speculated that Potanin would be relieved to sell Izvestia after probably having to listen to complaints from officials offended by Izvestia reports.
"I am glad for Potanin. He's had enough torture," Bovt said. "Imagine you are Potanin and you are sitting and counting your profits from selling nickel and all of a sudden you get calls from [St. Petersburg Governor Valentina] Matviyenko, [Emergency Situations Minister Sergei] Shoigu, [former Nuclear Power Minister Yevgeny] Adamov, the presidential administration and they all complain about Izvestia. Your life turns into a nightmare."
Potanin's other well-known newspaper, the tabloid daily Komsomolskaya Pravda, brings in more money than Izvestia, Badovsky said.
Senkevich denied media reports that predicted a change of editor at Izvestia after the purchase, Ekho Moskvy said.
In response to speculation Thursday, Sergeyev, the Gazprom spokesman, said that there were no plans to make Oleg Kuzin, the editor of the Gazprom-owned newspaper Tribuna, the editor of Izvestia. "Tribuna underwent a lot of positive changes under Kuzin, and it doesn't make sense to appoint anyone else there," he said, Interfax reported.
Kuzin could not be reached for comment Thursday, and his secretary, who did not give her name, said, "Oleg Sergeyevich has firmly said that he is not giving any comments today."
Boris Reznik, a member of the State Duma's Information Policy Committee, said Izvestia's current editor, Vladimir Borodin, was not "the worst option" because he was in favor of unbiased coverage.
Badovsky, however, said he was sure that Borodin would prove to be an interim figure and would be replaced. He speculated that Gazprom-Media would want to give the job to a well-known professional and said he had heard that Vitaly Tretyakov, a former editor of Nezavisimaya Gazeta, was a possible candidate.
Prof-Media and Gazprom-Media did not disclose the price of the deal, but media publishers polled by Vedomosti said it would most likely be between $10 million and $20 million. Potanin paid $40 million when he bought the stake the 1990s, Bovt said.
As Gazprom-Media announced the deal on Thursday, Hermitage Capital, one of the country's top foreign investment funds, released a report accusing Gazprom of wasteful spending on noncore activities. The fund said it wanted to know why the gas giant was spending a large percentage of its staff costs on noncore businesses from media to porcelain to poultry.
Gazprom paid $1.5 billion in salaries in 2004 to 120,000 staff working in noncore businesses, which, the report said, brought the gas giant losses of $276 million.
On Wednesday, Gazprom warned that its losses on gas sales in Russia would rise over fivefold in 2005 to about $1 billion.