CANNES – Russia’s leading independent media company, CTC Media, is taking stock after Russia’s President Vladimir Putin signed amendments to a mass media law that impose further restrictions on foreign ownership of mass media companies.
The amendments reduce the permitted level of foreign ownership of Russian mass media companies from 50% to 20%. The legislation will come into force on Jan. 1, 2016.
CTC Media, which is one of the top six broadcasters in the country, is registered in Delaware and is quoted on the NASDAQ. Nordic media company MTG owns a 37.9% stake.
CTC Media’s board of directors has formed an advisory committee consisting of non-executive directors, which is in the process of appointing financial and legal advisers, and evaluating the actions that the company may take in order to comply with the amended law.
“While these new legal requirements are not expected to directly adversely affect our operating business, they do have significant implications for the ownership structure of our Russian operating business by our American parent company and its international stockholders,” commented Yuliana Slashcheva, CEO of CTC Media. “We are analyzing our alternative courses of action in these circumstances, in order to comply with the law and best protect the interests of our stockholders.”
Jorgen Madsen Lindemann, MTG president and CEO, said: “This is obviously a complex situation and we are working closely with local management and our advisers to review the various options available to us moving forward. It is too early to come with a solution for each of the affected businesses, but we are looking at a range of potential outcomes. We have built up these entertainment businesses over 20 years and the channels are some of the most watched in Russia, so we will do all that we can to preserve the interests of all of our stakeholders.”
Among the Hollywood companies likely to be affected are the Walt Disney Co. and Discovery Communications, which both operate cable TV channels in Russia.