Foreign Publishers Quit Russia
Jan 18, 2019 9:27 am
The legislation was widely criticized by media industry leaders
Major foreign media holdings are leaving the Russian market due to legislation passed limiting foreign ownership of Russian media.
Edipresse believes that a 20 percent stake does not make the full-scale development of the company in Russia worth its while.
Switzerland’s publishing group Edipresse, which produces the magazines Mother and Baby, Landscape Design and Atelier here, has sold its Russian assets — 100 percent of the company Edipresse-Konliga — to its general director Maxim Zimin.
The decision was triggered by the approaching deadline for compliance with the media ownership law, which limits the stake of foreign owners in Russian media organizations to 20 percent.
The Swiss concern is not the only foreign publishing company which has opted to withdraw from Russia.
The German publishing group Axel Springer, which controls Forbes, OK! and GEO magazines, is also selling its Russian assets.
The legislation limiting the ownership by foreign companies to 20 percent of Russian media holdings was confirmed: previously, foreigners could own up to a 50 percent stake in Russian television and radio, while there were no restrictions for print media and online editions.
The penalty for violating the new law is the closing down of the media outlet in question. The law also bans foreigners, as well as people with dual citizenship, from founding media outlets in Russia.
According to lawmakers, the new restrictions, which were drawn up amid Russia’s confrontation with the West over the Ukraine crisis, are aimed at protecting Russians from harmful Western influence.
The law will affect TV companies CTC Media and Walt Disney, and most of the publishing houses in Russia, including Sanoma Independent Media, Conde Nast, Hearst Shkulev Media, Hubert Burda Media and Axel Springer.
U.S. media giant Discovery Communications set up a joint venture with its Russian partner, the major private media holding National Media Group, which received an 80 percent stake in the new company.
Another company restructuring its ownership model in order to stay on the Russian market is the largest independent media company in Russia, CTC Media, 75 percent of whose assets are currently owned by foreign companies.
CTC Media’s shareholders are now negotiating with Russian television holding UTV on the purchase of 75 percent of its assets.
Experts warn that foreign media companies will continue to leave the Russian market because of the new legislation, and that even companies with plans to stay on the Russian market will have to withdraw if they don’t manage to sell 80 percent of their assets.
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