Lear profits in Russia house
An investment company owned by U.S TV producer and entrepreneur Norman Lear has sold a key Russian station group called Independent Network Television Holding for $550 million to pumped-up local Russian player Prof-Media.INTH is the parent company of the TV3 network and its group of 28 O&Os in 26 of the country’s largest cities. Its signal reaches 66 million potential viewers. The net is not as politically sensitive as some other broadcasters because it focuses exclusively on entertainment rather than news (it’s a key buyer of Hollywood movies and series). Still, the price paid could be considered rather high, which will mean the owners must grow the station dramatically to make the deal work. Prof-Media’s most recent TV acquisition, for many fewer rubles, was the Moscow channel 2×2, which it will relaunch shortly as a national outlet for animation. Lear’s Act III Communications, which has been the controlling shareholder in INTH for almost a decade, acted as the seller’s rep for the transaction, concluding a 10-year investment and management project in Russia. TV3 began as a single commercial station in St. Petersburg but has grown into a full-fledged national network. “When Act III Communications asked me to join them in building a television business in Russia 10 years ago, we were venturing into unknown territory,” said INTH chief exec Tim McDonald. “Yet today we are passing on a healthy, thriving business, built on the best principles of commercial transparency and corporate responsibility.” The outright sale is a change of direction for INTH, which earlier this year had been looking into an IPO abroad. (TV3’s larger rival CTC, which listed in New York last summer, is valued at about $2.5 billion, which suggests that $550 million may not be such a bad price for TV3.) “Not only is TV3 an extremely high-growth and high-margin business, there are few media businesses in Russia with TV3’s quality of corporate governance,” Prof-Media CEO Rafael Akopov said. Akopov was referring to the fact that the Russian government makes a point of meddling in the newscasts and financial affairs of broadcasters, making it tricky to remain independent. It’s unclear what immediate changes Prof-Media may make to TV3, which broadcasts movies, series and specials around the clock and is reckoned by outsiders to be profitable. Prof-Media, which is owned by loyal Kremlin oligarch Vladimir Potanin, has interests in publishing, radio, television, theaters and the Internet. Its ownership of Central Partnership, a local film and TV series producer, could provide potential synergy for its TV3 network. L.A.-based Act III has interests in broadcasting, music and feature films.