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. Last Updated: 07/27/2016

Turner Offering $300M For NTV

A consortium of foreign investors led by CNN founder Ted Turner is ready to pay at least $300 million for stakes in NTV television and its sister media — provided Turner gets assurances from President Vladimir Putin that the Kremlin will not interfere in NTV's reporting or operations.

NTV is in debt to state-owned Gazprom to the tune of almost $300 million, and its journalists claim the Kremlin is using that debt to squeeze the station's independence.

Enter Turner and his millions, the white knight investor.

"If Turner can pick up the phone and tell Putin, 'I'm giving you an elegant way out of this controversy that's damaging your reputation and the reputation of Russia,' it will be a choice that everyone will see," said Christopher Renaud, head of finance and strategic development for Media-MOST, NTV's parent company.

"Does Putin's government want money, investment and a balanced and free press? Or does it just want control?

"Everything rests on whether they [investors] hear what they want to hear," Renaud told a news briefing Friday. "If they get a phone call that says 'Please come now, put in the money, we won't bankrupt all the companies, we won't throw you in jail the first day you set foot in Russia, licenses will not be taken away,' the deal could be funded and signed in four to five weeks."

Turner knows Putin personally — he bankrolled the 1994 Goodwill Games in St. Petersburg and met occasionally with then-Deputy Mayor Putin — and in a statement last week he expressed his interest in NTV and was "looking forward" to Putin's reply.

Renaud says Turner has "increased his efforts" to talk to Putin, so far without success. But over the weekend Alexei Volin, an influential aide to Prime Minister Mikhail Kasyanov, offered little encouragement.

"The state has no right to create special conditions for any separate market player," Interfax quoted Volin as saying. "An agreement with Turner's proposals would be an example of state protectionism and a violation of the principles of free competition."

Using a term for mob protection rackets, Volin suggested Turner was asking Putin to be his krysha, a proposal "that has nothing in common with the rule of law," he said.

Other players in the real-life soap operas surrounding NTV have also spoken up. Prosecutors, for example, Friday seized the house just outside of Moscow belonging Media-MOST founder Vladimir Gusinsky. On Sunday, prosecutors set off for Madrid, where Gusinsky is under house arrest.

Leonid Troshin, a spokesman for the Prosecutor General's Office, told Interfax the delegation took documents aimed at convincing Spain to extradite Gusinsky, who was picked up there just before Christmas. Prosecutors say that among other things, Gusinsky misrepresented the value of his company's assets to take out loans from state-owned Gazprom, the natural gas monopoly.

Gazprom-Media, meanwhile, the largest shareholder in NTV, said it would not give up stakes it holds as collateral against some $300 million in loans no matter what — although Gazprom-Media director Alfred Kokh did add that if Media-MOST wants to sell other shares to raise money, "Let them sell."

That was not much of a green light: The whole point of selling Media-MOST stakes for $300 million would be to raise enough cash to get back other stakes held by Gazprom & Co.

As that suggests, from Madrid to Moscow and from CNN to Credit Suisse First Boston, the battle for Media-MOST has become mind-numbingly complex.

Anna Kachkayeva, a media analyst with U.S. government-funded Radio Liberty, says it is difficult even for experts and government officials to keep up with the details of it all.

Click here to read our Special Reporton the struggle for Media-MOST.

"If only money were involved, everything would have been over a long time ago," Kachkayeva said. "But all the time, politics interfere."

Media-MOST owes $261 million to CSFB under a loan that Gazprom guaranteed and which matures in July, and another $40 million borrowed from Gazprombank.

That Gazprom-brokered $300 million was not the only state assistance ever to benefit NTV, the nation's leading independent television station. Media-MOST was built in part upon the sort of special favors and insider deals associated with "oligarchs" like Gusinsky.

Boris Yeltsin in his memoirs, for example, offers a rhetorical question to those who complained that Uneximbank grew fat on state assets: "And Gusinsky's NTV — who gave it the prestigious broadcast frequency, who gave it cheap transmission rates, wasn't that [also] the state?" After backing Yeltsin's 1996 re-election, the Kremlin and NTV mostly got along.

Then, in June 1999, state-owned Vneshekonombank called in a $42.2 million loan. A few months later, Gazprom chief Rem Vyakhirev emerged from a Kremlin meeting to complain of NTV's coverage of the war in Chechnya — and at about the same time, Gazprom started calling in loans.

NTV's journalists say the Kremlin has been trying to muzzle free press. Now they are challenging Putin to prove them wrong — by letting Turner become their partner and buy their independence for them.

"It is a hard choice for [the president]," said NTV general director Yevgeny Kiselyov. "On the one hand, there is his personal reputation and the country's reputation; on the other hand, a desire to hit on the head the stubborn, scandalous tycoon and the team of reporters who were telling the truth."

Media-MOST and Gazprom-Media on Nov. 17 signed an agreement to sell a 25 percent plus one share blocking stake in NTV to a "recognized international investor."

That Nov. 17 agreement indicates that as collateral for the CSFB loan guarantees, Gazprom-Media holds a 19 percent stake in NTV and 25 percent stakes in Media-MOST's other subsidiaries. Gazprom also holds another 46 percent outright of NTV.

Last week, the agreement fell apart and both sides turned to courts in London, Gibraltar and Moscow — at issue, who gets to keep the stakes put up as collateral. In an unrelated matter, prosecutors also arrested a top Media-MOST finance official.

By week's end the picture again changed as Turner's proposal took shape. Renaud said Media-MOST planned to sell to the Turner-led consortium unspecified amounts of unencumbered, Gusinsky-controlled stakes in NTV, THT second-tier television network, NTV Plus direct-to-home television and the Sem Dnei publishing house, which includes Segodnya newspaper and Itogi magazine.

The $300 million raised would then allow Media-MOST to pay off CSFB and Gazprombank. That done, Renaud said, Gazprom-Media should immediately surrender stakes held as collateral.

At a briefing Friday, however, Kokh said he would not surrender the 19 percent NTV stake to Media-MOST even if all of the debts are paid.