Reports: UES Set to Sell Ren-TV

Control of Ren-TV, the last relatively independent television channel, will change hands next month in a deal that could further limit press freedoms, Kommersant and Vedomosti reported Thursday.

A Ren-TV spokeswoman confirmed that electricity monopoly Unified Energy Systems was in talks to sell its 70 percent stake in the channel to state-controlled Evrofinance Mosnarbank and broadcasting company RTL Group, owned by Germany's Bertelsmann AG.

But the spokeswoman, Maria Olshanskaya, declined to say when the deal might be completed. "It does not entirely depend on us. There are several parties concerned," she said.

UES board member Andrei Trapeznikov said the company was still considering whether to sell. "There has been no specific decision made by the UES board of directors to move ahead with the sale," he said.

Vedomosti quoted Ren-TV president Irina Lesnevskaya as saying the deal would happen in May. Kommersant, without citing any sources, also said the deal would take place in May.

UES first announced plans to divest from Ren-TV, a noncore asset, in February 2003. Russian media have since speculated that potential buyers might include RTL Group and Evrofinance. Lesnevskaya and her son Dmitry Lesnevsky, Ren-TV's general director, own the other 30 percent of the channel.

UES has appeared undecided about the price it wanted to charge for its 70 stake, casting doubt on whether the sale would go forward anytime soon.

PricewaterhouseCoopers valued the stake at $40 million to $60 million, depending on how it was sold, Kommersant quoted a UES official as saying. UES considered the estimate too low and asked PwC to reconsider its valuation, the official said.

Media market players and analysts valued the stake at $150 million to $300 million, Vedomosti said.

Vedomosti estimated the channel's advertising profits in 2004 at $80 million.

Ren-TV has been fighting legal attacks in recent months that some analysts say could be linked to a drive to lower the price of UES's stake. The channel received an official warning from the Federal Service for Media Law Compliance and Cultural Heritage in November for what the service deemed to be pro-drug propaganda on the television show "Priznaki Zhizni," or "Signs of Life," hosted by Artyom Troitsky.

Earlier this month, Ren-TV escaped a second warning by winning a court case in which it was accused of promoting drugs, violence and homosexuality by showing the cartoon series "The Simpsons" and "The Family Guy."

Under Russian law, a second warning could result in the channel having its license revoked.

Ren-TV is widely regarded as the last remaining relatively independent news channel. Other privately owned national channels such as STS or TNT do not have dedicated news coverage, concentrating instead on entertainment.

Although majority owned by UES, which is government-owned, Ren-TV has enjoyed greater editorial independence than the three other state-controlled channels that have a national reach and news content -- Channel One, Rossia and NTV. Ren-TV hired some of the journalists who fled NTV after state-controlled Gazprom-Media acquired the channel. Former NTV journalist Marianna Maximovskaya now hosts Ren-TV's Saturday news show.

"Ren-TV has up to now been the last national television network to keep its news coverage independent, as far as this is possible under present conditions," said Eduard Sagalayev, president of the National Association of Television Broadcasters, Kommersant reported. "It would be naive to suppose that the possible financial and structural changes at the television company would not affect ... its news policy."

Dmitry Badovsky, an expert at Moscow State University's Institute for the Research of Social Systems, said Germany's RTL would most likely define the channel's policy and it would remain liberal, but the government wanted leverage to influence the channel if need be.

Evrofinance was making its bid for part of UES's stake on the government's behalf, he said.

By law, foreign companies cannot own 50 percent or more of a national television channel or network such as Ren-TV.

Ren-TV was launched in 1991 as a production company making programs for other television channels and began broadcasting on its own network on Jan. 1, 1997.

The channel is now available in over 800 towns and cities countrywide and has an estimated 4.5 percent to 5 percent share of the national television audience.

Evrofinance Mosnarbank is controlled by a group of state-owned banks, including Moscow Narodny Bank, Vnesheconombank and Vneshtorgbank. Its media assets include St. Petersburg-based Channel 5 and a 50 percent share in the Prime-Tass news agency.

Mikhail Yuriev, head of Evrofinance, said in an online interview in December that journalists critical of the state should be denied state-funded medical aid and should not expect a prompt police investigation if they were in trouble.

"Let them hire personal bodyguards and a private doctor," he said in an interview to the media news portal press-attache.ru.

Germany's Bertelsmann media group includes Europe's No. 1 broadcaster RTL Group; the world's largest book publisher Random House; Gruner + Jahr, Europe's biggest magazine publisher; and BMG, the parent company of Sony BMG Music Entertainment and BMG Music Publishing.

Bertelsmann officials were not immediately available for comment.

Evrofinance had no comment Thursday on whether it was involved in a bid for Ren-TV. Its vice president, Andrei Galiyev, told Vedomosti that he was "not commenting on rumors."

UES CEO Anatoly Chubais survived a roadside ambush last month uninjured. Why he was targeted remains unclear, and speculation has swirled that the attack might have been politically motivated or linked to UES's ongoing reorganization.

In the 1990s, Chubais was an architect of Russia's controversial privatizations and served as President Boris Yeltsin's chief of staff. He is a co-founder of the liberal Union of Right Forces party.