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. Last Updated: 07/27/2016

Kiselyov: 'NTV Is United Like Never Before'

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When addressing his television viewers, Yevgeny Kiselyov is a political analyst. When addressing the authorities, he is a journalist and an independent political figure. When Vedomosti interviewed him as the general director of NTV, he was a businessman. Kiselyov was prepared to discuss business, although he was cautious about naming concrete figures since he did not want to give additional cards to the company's many enemies.

Q:
Will you attend the meeting of NTV shareholders that Gazprom-Media plans to organize?
A:
I doubt that very much. They will take away our board of directors and breach all of our lawful rights — not waiting for the verdicts to be delivered in the many court cases. A powerless board of directors will be formed to which a powerless general director will be appointed. I wonder, will they arrive at NTV with the OMON [special police troops] to clear out our offices? By the way, I sat in this office, where you and I are now talking, when Igor Malashenko was still the general director. And when [the next general director Oleg] Dobrodeyev left, I did not move into his office but stayed in this one. So I am wondering if [head of Gazprom-Media Alfred] Kokh intends to remove me as general director? What about the host of the program "Itogi"? What about the author and host of several new documentaries of the series "Noveishaya Istoria," on which work is now being completed? Or everyone at once? If they resort to that then they'll make another stupid mistake. It will just lead to the complete end of our broadcasting. NTV, after all, is not just the abbreviation of three letters, it's not only a name. NTV is a team of like-minded people who will never tolerate bad treatment. People will simply get up and disappear. There is no doubt about this.

Q:
Koch said Gazprom-Media is prepared to sell a controlling stake of shares to foreign investors if Vladimir Gusinsky will first sell him the largest stake of shares.
A:
Koch lies all the time, ever since he was appointed as privatization minister. Not long ago, he announced Gazprom-Media intends to independently manage NTV. He said he needs a stake of 75 percent in order to make changes in the charter of the company, increase its rating and capitalization. Koch increase our capitalization — what a joke.

Click here to read our special report on the Struggle for Media-MOST.

For the most part, he sold state property quickly and cheaply to his friends and acquaintances. As for the value of NTV, I might remind you that in 1998, when we were preparing for the first emission of shares on, the American Nasdaq stock exchange , the U.S. Securities and Exchange Commission registered the value of the company at $1.2 billion. At that time, we behaved cautiously because in the aftermath of default, the market was still reeling and we didn't want to release shares that would be worthless.

In January 2000, Capital Research Management acquired a 4.5 percent stake in NTV for more than $20 million. This shows that a year ago, Americans appraised the company for a higher price than Koch does now. And this year, the advertising market visibly improved.

Q:
But you're concealing current advertising expenditures?
A:
That's not the case. Our corporate taxes last year totaled more than 150 million rubles [about $5 million]. How would we have paid those taxes if we did not have any profits? We should remember that in this country, we practice double bookkeeping. According to [U.S.] generally accepted accounting principles, where a different system of amortization is used, we have losses in one category, EBITDA [earnings before interest, taxes, depreciation and amortization]. But in accordance with Russian accounting methods, NTV ended last year with a small profit. If another crisis does not break out, we will yield a profit of $10 million to $15 million.

Q:
How do you explain the disparity between your results according to Russian bookkeeping and GAAP?
A:
I do not want to divulge unnecessary information to our enemies and competitors. Moreover, if we are talking about our results for this year, I am simply afraid to jinx myself.

Q:
Many people have now launched court proceedings to retrieve their money from Media-MOST and NTV in particular. Given the situation that has developed around your company, do you intend to lower your expenditures?
A:
We need to maintain positive financial results and high ratings. The court is one thing, television is another — the show must go on. Moreover, all of those courts have no influence over our advertising clients. Advertisers continue to line up in our corridors.

Q:
Given that you have poor results for EBITDA, a strained relationship with the government and a number of financial liabilities, why is Ted Turner interested in the packet of NTV shares?
A:
Why are The Wall Street Journal and the Financial Times interested in the newspaper Vedomosti, which does not generate any income? Turner invested his money in the creation of the global information network CNN, although he didn't expect to receive dividends the next day. Of course, given our mentality, it's more natural to invest money only in something "short-lived," the risks are too great for long-term investment. But the real value of the company depends not only on the current operations but on the prospects of growth.

Q:
You haven't considered the possibility that for the sake of restructuring the company, which Gazprom is insisting upon, Turner and head of Gazprom Rem Vyakhirev could join forces and purge the management of NTV. And in order to avoid conflicts with the authorities, they might demand the tone of "Itogi," "Kukly" and "Itogo" be softened.
A:
I cannot imagine that Turner, who first launched the globalization of information and [George] Soros with his Open Society, will risk their reputations and make an agreement with the Kremlin, [Press Minister Mikhail] Lesin and Koch behind our backs. Turner, by the way, is now investing a large sum of money in the creation of private nature preserves since he believes the U.S. government has failed to protect the environment.

Q:
You believe Turner and Soros perceive investments in NTV as a humanitarian project?
A:
I think that point of view exists, although I cannot say that it is 100 percent true. You should ask them. But I suspect that alongside their business considerations, there are, in the best sense of the word, idealistic considerations.

Q:
Koch, in reference to the audit of PricewaterhouseCoopers, insists NTV is concealing financial information and is taking a portion of its income offshore.
A:
Please excuse me from the necessity of having to comment on everything Koch says. It's a thankless task and I am forced to constantly repeat the same phrase: "Koch is lying." There was never an audit. PricewaterhouseCoopers has served as our official auditor for many years. Their report for 2000 will most likely appear in April and May. It's true that some time ago, a few specialists from PricewaterhouseCoopers were hired by Gazprom to work for NTV in the capacity of consultants, not auditors. They wrote a general document. An audit cannot be conducted over the course of two weeks. But it did not contain any information about taking money offshore. It was Gazprom and the prosecutor's office that first started talking about the removal of assets and earnings. We were forced to hire a large international law firm [U.S. firm Akin, Gump, Strauss, Hauer & Feld, L.L.P.]. They conducted an audit and wrote a report. As soon as we gave the report to the prosecutor, the pretensions stopped. I should say that some of our clients prefer to pay for advertisement broadcasts through our daughter company abroad. It is normal practice for the Russian television market. By the way, the company is "hidden" in Gibraltar under the conspiratorial name of NTV Ltd. I can say that PricewaterhouseCoopers, in the course of its audit, studied our consolidated balance, in which [NTV Ltd.] is included. Everything else is a lie.

Q:
How will you return your debts to Sberbank, Vneshtorgbank, Gazprombank and other creditors?
A:
We need to clarify that NTV does not owe a kopek to Vneshekonombank, Sberbank and many others that call themselves our creditors. We have a debt of $40 million to Gazprombank and Media-MOST. Media-MOST, as our shareholder, covered our losses after the default when the advertising market collapsed. Without the credits we received, we would not have survived. ORT received a credit of $100 million from the government, which, obviously, will be prolonged until 2002. You should read the recent audit of the Audit Chamber on the financial activities of VGTRK, [the All-Russian State Television and Radio Co., which RTR is part of]. We were forced to muddle through ourselves. Not long ago, Media-MOST offered to settle the Gazprom debts with a double emission, issuing the shares of NTV and proportionally increasing the charter capital of the company. In that scheme, Gazprom would preserve its stake of shares. That plan was discussed on Feb. 5 by the board of directors, on who made a decision to conduct a shareholders meeting in Gibraltar. Vyakhirev and his first deputy [Vyacheslav] Sheremet took part via telephone conference. But they were not ready to immediately give an answer and said, "Let's discuss this matter later." Our offer is still valid, but if Gazprombank abruptly demands money, we will return it.

Media-MOST, not NTV, could in the future accumulate the debts to Sberbank, approximately $50 million for each credit; the period of repayment has not yet expired. There are OVVZ government bonds of the fourth tranche for repaying the credit. If for example we compare the debt with the size of our credit from Media-MOST, we have a profit of 24 percent. I haven't mentioned that in the third tranche of the OVVZ, the government will owe Media-MOST approximately $20 million, not including fines. And altogether, the Finance Ministry has debt to Media-MOST totaling around $250 million for the third and fourth tranches. Unfortunately, we are not the Paris Club, and we don't possess such levers to force the government to repay its debts.

Q:
Could NTV insist upon retaining an unchanged information policy with the hatred that Gazprom and Rem Vyakhirev personally have demonstrated?
A:
Of course, it cannot. Precisely for that reason, we have resisted Gazprom's illegal attempts to reestablish control over the company. We already have a fresh example of what could happen. When Gazprom-Media merged its 25 percent plus one stake in Media-MOST's printing house Sem Dnei with its director Dmitry Biryukov's 25 percent stake to obtain a majority, the coalition announced its intention to shut down Segodnya newspaper. We are talking about one of the leading daily political papers in Russia. The real reason for that decision was their disapproval of the newspaper's editorial line. At the same time, the directors of Itogi magazine received a warning. They could lose their jobs if they don't change the magazine's critical attitude toward the government.

Q:
Have you considered stepping down as the general director of NTV in order to defuse the situation?
A:
I would like to dismiss such rumors circulated on the Internet. At the moment, there are fewer grounds for me to resign than in the past. We have at NTV a wonderful, creative environment. The collective is united like never before. We are holding our position on the market, our spending is now two to three times lower than those of other television companies, our main competitors. … I do not see any reasons for shareholders to object to how the higher management team is working other than political reasons.