. Last Updated: 07/27/2016

Gazprom Buys 20% Stake in Top Daily

Shareholders of Komsomolskaya Pravda, Russia's largest circulation daily newspaper, voted Friday to sell a 20 percent stake to state-controlled gas monopoly Gazprom, extending the giant corporation's already impressive portfolio of influential media property.


Gazprom, 40 percent state-owned and a vocal supporter of the current government, already owns stakes in two national TV channels: a 30 percent stake of NTV television and an undisclosed stake in RTR, another major Russian television channel.


The purchase of Komsomolskaya Pravda, a Moscow-based daily with a circulation of 1.4 million, spreads Gazprom's influence into print media.


"We're extremely pleased with today's vote," said Komsomolskaya Pravda chairman Vladimir Sumgurkin, after shareholders, mostly company employees, approved the deal. "It presents us with many new possibilities and will in no way affect the paper's independence."


Sumgurkin said the deal would probably be signed by the end of this year.


He said the newspaper will hand over its shares in exchange for investment in technical restructuring -- from satellite communications to computers and printing plates -- in the 40 Russian cities in which the newspaper is published. No sum was disclosed for the total value of the investment.


Komsomolskaya Pravda, which was founded in 1925 as about them. They're always interested in political stability," he said. "And we're a paper that already supports social peace, democracy and social development. So we have a common understanding of things and they won't need to get involved in our editorial policy."


His reporters appeared to be in full agreement.


"We support Gazprom as one of the strongest supporters of our national industry," said economics reporter Sergei Blagodarov. "Gazprom holds Russia together like a stick holds a shashlik and we'd support them even if they didn't give us money. They don't try to influence what we write."


Gazprom has close ties with the government. Victor Chernomyrdin ran the company before becoming prime minister in 1992 and is believed to be a major shareholder.


Blagodarov said his newspaper had rejected investment offers from other companies including Alfa Bank and Inkombank "because they offered too little money and because they're wild capitalists."


Gazprom will appoint a representative to the company's executive council, Sumgurkin said, adding that the council has no editorial say.


He said Komsomolskaya Pravda has been making a profit for over a year and that Gazprom therefore hopes to make an economic, rather than political gain from the paper.


But according to one expert, it is unlikely that this is the driving force behind Gazprom's potential investment.


"I don't think they're investing in Komsomolskaya Pravda to make money," said Yasen Zasursky, dean of Moscow State University's journalism faculty. "I think they want to look human as an investor in the media and they want to diminish criticism in the press."


Gazprom officials could not be reached for comment Friday, but have said in the past they are trying to be "actively present" in the mass media.


Foreign media and international lending agencies like the International Monetary Fund and the World Bank have criticized Gazprom, Russia's biggest exporter, for using its political influence to avoid tax. Few Russian media outlets, however, have taken up the issue.


Gazprom, which is planning to start selling its shares on world markets this month, recently lashed out at foreign media for reports that accounts of its regional subsidiaries had been frozen and assets seized by the government in an effort to recoup 15 trillion rubles ($2.8 billion) in back taxes.


The Komsomolskaya Pravda sale extends a trend among large Russian companies with close ties to the government who have increasingly moved into the Russian median The MOST Group owns a major stake in NTV television and the Segodnya daily newspaper. Stolichny Savings Bank is a shareholder in the major financial daily Kommersant Daily. A consortium led by Boris Berezovsky, president of auto company Logovaz and the Sibneft oil company, controls ORT television.


Many of these media outlets were accused of bias towards President Boris Yeltsin during the presidential election campaign.


Komsomolskaya Pravda's average circulation of 1.4 million rising to 2,250,000 copies on Fridays makes it a major force in forming Russian opinion, analysts said.


"They have a big influence in places like Siberia and other areas where Gazprom has pipelines and reserves," Zasursky said, adding that it was too early to say whether the company was likely to affect Komsomolskaya Pravda's editorial policy.


Gazprom earlier this year signed a deal on launching U.S. communication satellites, but Sumgurkin said it was unlikely that these would be used by his newspaper.