Russia’s parliament has passed into law a new ‘Mass Media’ set of regulations limiting the stakes that can be held by foreign companies. President Putin signed the enabling amendments earlier this week.
The amendments reduce the permitted level of aggregate foreign ownership of Russian mass media from 50 per cent direct ownership to 20 per cent direct or indirect ownership, and apply to both existing and future ownership structures. The legislation will come into force from 1 January 2016, with Russian owners holding through off-shore holding structures having until January 2017 to comply.
Modern Times Group’s CTC Media is one of the broadcasters affected. It says: “CTC Media Inc., of which MTG owns 37.9 per cent, because it is a US registered and listed corporation that directly or indirectly owns 100 per cent of the shares of a series of Russian legal entities that operate primarily broadcast media entertainment businesses in Russia. The change also affects MTG’s ownership of its own entertainment channels that are available on a wide range of Russian cable and satellite TV networks, and its shareholding in the Raduga TV satellite platform.
Jørgen Madsen Lindemann, MTG President and CEO, in a statement said: “MTG is also working independently with its own financial and legal advisers to decide on what actions will be taken regarding its Russian holdings and operations, and is consulting with other international media owners and investors that are affected by this legislation.
“This is obviously a complex situation and we are working closely with local management and our advisers to review the various options available to us moving forward. It is too early to come with a solution for each of the affected businesses, but we are looking at a range of potential outcomes. We have built up these entertainment businesses over 20 years and the channels are some of the most watched in Russia, so we will do all that we can to preserve the interests of all of our stakeholders.”