By Paul Sonne
MOSCOW--Russia's parliament passed a bill to restrict foreign
ownership of Russian media companies to 20%, a move that stands to
force U.S. and European companies to relinquish control over
newspapers, magazines and television networks, further restricting
Russia's media landscape.
Russia's lower house of parliament, known as the Duma, passed
the bill 430-2 on Friday. It is all but certain to win approval
from the upper house and the Kremlin in the coming weeks, thus
becoming law.
The new rules would extend the government's control over a media
sector that already counts few voices of dissent. Since Vladimir
Putin came to power nearly 15 years ago, the state has consolidated
control over the television sector in partnership with tycoons
friendly to the Kremlin, clamping down on the main source of news
for most Russians.
The new law is likely to further extend that influence by
shifting control of the remaining, foreign-owned print outlets that
have weathered Russia's media crackdown to domestic owners, who
presumably would be more susceptible to Kremlin pressure.
"We perfectly understand that those who control the information
control the world," Vadim Dengin, a Duma deputy from the
nationalist LDPR party, said upon presenting the bill this past
week. He warned that some foreign-owned Russian publications, which
he did not name, already amounted to a "Fifth Column" in Russia,
supporting the views of the West.
Since the crisis erupted in Ukraine, the Russian government has
become increasingly paranoid about what it views as destabilizing
foreign influence. Russian lawmakers accused the U.S. and Europe of
fomenting a coup in Kiev early this year and have repeatedly
condemned those who criticize the Kremlin's actions in Ukraine as
traitors and foreign agents.
Of late, foreign-owned publications such as the Russian versions
of Forbes and GQ, as well as the business newspaper Vedomosti, have
been some of the last remaining mainstream outlets willing to
devote space to the views of Kremlin critics.
Germany's Axel Springer SE owns the Russian edition of Forbes.
Advance Publications Inc.'s Condé Nast owns the Russian versions of
GQ, as well as Vogue, Glamour and Tatler.
Both companies declined to comment on the bill Friday.
The Wall Street Journal joined forces with The Financial Times
and a local partner to launch the Russian financial newspaper
Vedomosti in 1999. It has since become one of Russia's most
influential news outlets.
It is owned jointly by News Corp's Dow Jones & Co.,
publisher of the Journal; Pearson PLC's FT Group, publisher of The
Financial Times; and Sanoma Independent Media, a unit of Finland's
Sanoma OYJ. Though the paper's main fare is business coverage, it
has recently published opinion articles by well-known economist
Sergei Guriev, who fled the country last year amid scrutiny by
Russian investigators, and an interview with anticorruption blogger
Alexei Navalny, a Kremlin critic who has found himself under house
arrest for months.
"What are you afraid of? Vedomosti?" Dmitry Gudkov, one of the
two Duma deputies to vote against the law Friday, asked the
parliament during deliberations this week. "But you yourselves read
this newspaper."
Mr. Gudkov suggested the bill was a crippling blow to Russia's
media business and a last gasp for independent news. "You already
control all the main television channels. You already control
practically all of the main newspapers," he said to his fellow
Russian lawmakers. "Could you at least just leave yourself the
possibility of accessing normal, objective information?"
Dow Jones, the Financial Times and Sanoma declined to
comment.
The bill will prevent foreign investors from buying more than
20% of Russian media outlets starting Jan. 1, 2016. Foreign
companies that already own stakes have until February 1, 2017 to
divest. Foreign-owned media outlets must present documentation to
the state communications regulator on the identity of their new
domestic owners by Feb. 15, 2017.
The legislation stands to affect a number of entertainment
publications and television channels that have little to do with
politics.
For example, The Walt Disney Co. owns 49% of the Disney Channel
in Russia as part of a joint venture the Russian television and
radio company UTH Holding. Sweden's Modern Times Group MTG AB owns
a nearly 40% stake in CTC Media Inc., a popular group of
entertainment channels. Germany's Hubert Burda Media owns the
Russian edition of Playboy, the girls' magazine Oops! and an array
of Russian food, automobile and interior-decorating magazines that
would fall under the law.
A Disney spokeswoman didn't immediately respond to a request for
comment. A spokesman for MTG said the Swedish firm was following
the law's progress and analyzing what potential action could be
taken. A spokesman for Hubert Burda declined to comment.
The U.S. traditionally limited foreign companies from owning
more than 25% of American television and radio stations. But the
Federal Communications Commission voted unanimously last November
to allow exemptions to the rule, opening up the market to foreign
owners.
((http://online.wsj.com/news/articles/SB10001424052702303289904579197954214094872))
Domestically-owned Russian news outlets that have published
articles unfavorable to the Kremlin have increasingly come under
pressure in recent years. Both Gazeta.ru and Lenta.ru, two
Russian-owned online news outlets that often took an independent
line, found their editorial management replaced with Kremlin
loyalists after they published critical content.
TV Dozhd, the only Russian television channel to regularly
invite opposition-minded guests on air, came under pressure last
year after it ran an online poll about the siege of Leningrad
during World War II that many Russian lawmakers deemed offensive
and unpatriotic. Cable operators and advertisers quickly dropped
the station, putting it on the brink of collapse.
On Friday, some Russian media executives voiced criticism of the
legislation passed in the Duma. Pavel Gusev, the editor of the
Russian tabloid Moskovsky Komsomolets and chairman of the Moscow
Journalists Union, said the bill had been passed in record time
without any proper consultation with media owners or members of the
public.
"I consider this an unacceptable violation," Mr. Gusev said,
according to the Interfax news agency. "Because laws of social
significance--and media outlets are social institutions--have to be
discussed with the public."
Write to Paul Sonne at paul.sonne@wsj.com
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