Billionaire Mikhail Prokhorov Purchases Controlling Stake in Dozhd TV Channel

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Russian billionaire Mikhail Prokhorov has begun a new business venture with the purchase of a controlling stake in the liberal Dozhd television channel.

The purchase is still under negotiation between Dozhd TV and Prokhorov’s Onexim group, according to Natalia Sindeeva, General Director of Dozhd. She said the channel is certainly interested in the deal in order to draw investments, however she added that Onexim would not gain full control of the company.

“We need investment for further technical and content development,” she said.

Onexim is also seeking to buy stakes in other key areas of the Russian liberal media market, namely only news portal and free newspaper Bloshoi Gorod, both which are currently owned by Sindeeva.

If it goes through, the purchase would add to Prokhorov’s substantial holding in the Russian media market. Prokhorov’s company Onexim already owns the up-market Snob magazine and a 51% stake in media holding RBK Group, which owns a business newspaper and television channel.

The recent business venture has sparked speculation of political motives for Prokhorov. He is Russia’s third richest man and had a public fallout with the Kremlin in September after he was publically ousted from liberal, pro-business party Right Cause. Last week, gold mining company Polyus Gold (which Prokhorov owns a controlling stake in) announced a delay in its London’ listing after a foreign investment commission led by Prime Minister Vladimir Putin ordered more information to approve the company’s relocation to Britain.

Analysts looking at the situation, however, say that Prokhorov has strong enough business motives in the two purchases to allay any political motives. Financial terms of the deal are not yet known, but Prokhorov stands to gain control over a significant audience if it is successful.

Konstantin Chernyshev, telecommunications, IT and Media analyst at Urasib, said, “It is very difficult for small media projects to survive and draw advertisement, so mergers are a natural development on the media market. Though maybe Mikhail Prokhorov has other motives since the new group will become an alternative to National Media Group.”

National Media Group is currently the biggest player on the Russian media market, owning blocking shares in Channel One, St. Petersburg’s Channel 5, Ren-TV, Russkaya Sluzhba Novostei news agency and Izvestia newspaper. In June the group also bought a blocking stake in STS-Media, one of the main producers of entertainment programs in Russia.

Last week, Onexim fired Snob Magazine Editor in Chief Vladimir Yakovlev after the magazine failed to meet Onexim’s financial expectations, earning $8.5 million in 2011 instead of the forecast $13.5 million.

Source: The Moscow News

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