Most-Media leads Mosfilm suitor list

MOSCOW — Scheduled for privatization this year, Mosfilm studios — the now cash-strapped flagship of the Russian film industry — is considering potential investors after an initial approach from the Most-Media group, led by chairman Vladimir Gusinsky.

Most-Media’s offer proposes an immediate interest-free loan of $15 million to the studio for investment in production and pavilion repair, followed by a further $166 million credit line scheduled over six years, company spokesmen said last week.

In return, Most-Media would expect to receive a 49% share in the studio, with the remaining 51% divided between studio directors and staff. Whether Russia’s government would retain a symbolic golden share is uncertain.

The long-term credit line is intended as production funding for a projected 15-20 features. From an annual output of as many as 100 films at the height of its Soviet glory, Mosfilm’s production has fallen to only five or six films a year.

Formed at the beginning of 1997 as the controlling company for Most Bank’s media interests, Most-Media controls the NTV TV station, NTV-Plus satellite subscription service, as well as NTV-Profit, a film production and distribution company that is developing plans for multiplex screens in Moscow.

Gusinsky’s hunch appears to be that cinema exhibition in Russia will only pick up when audiences have a good choice of good local product — and Mosfilm would be the prime location from which to boost this. What remains uncertain however, is whether under the best possible scenario projected new pics could gross enough to service, let alone repay, debt of this scale.

And if they can’t, critics of the deal are worrying that Mosfilm’s other assets might come into play — such as the studio’s 36 hectares of central Moscow property. As for the studio’s library of more than 2,000 pics, Studio assistant director Abdurankhmet Mamilov assured local press that there was no chance that the archive will be included in the deal.

Privatization mechanisms for Mosfilm, as well as other of the former Soviet Union’s cultural megaliths, is yet to be confirmed, awaiting parliamentary procedure. And there is rumored interest from Russian national TV channels in Mosfilm as well — so the studio may have the luxury of choosing from would-be suitors.

Apparent initial reaction to the Most-Media bid was positive from eight of the studio’s board of 12 directors, including studio director Vladimir Dostal. Only three — film directors Karen Shakhnazarov, Vadim Abdrashitov and Vladimir Naumov — expressed unease.

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