LONDON — The long delayed privatization of Russia’s oldest film complex, Moscow’s Gorky Studios, looks set to go ahead this year after a government decision to sell it was signed by prime minister Viktor Zubkov.
The decision to sell the entire 100% government stake in the studios, founded in 1915, is likely to prove unpopular with studio head Stanislav Yershov, who has long urged the retention of a 25% plus one share public stake to protect the studios from being exploited by property developers.
The Russian government decision, announced via state news agency Novosti, comes three years after political wrangling abruptly cancelled an earlier attempt to put the suburban Moscow film complex up for sale.
At the time, February 2005, bidding for the majority stake in the studios was set to start at $4.4 million and Yershov suggested that a further $16 million investment would be needed for modernization.
Since then, property prices and demand for studio space in Moscow have boomed, meaning that this year’s sale is likely to attract strong interest, particularly since investors will now be bidding for complete ownership and control.
Studio chiefs fear that may put Gorky’s position as a leading and historic movie making complex under threat.
In January, Yershov cautioned that Gorky’s privatization needed to be handled carefully in order to preserve its status as a film studio and warned that any buyer would need to make a major investment to make it world class. Potential buyers for the studios included state gas giant Gazprom, he said at the time.
Selling 100% of state shares in the studios might bring more risk than reward, Yershov said, as a new owner may seek to change the studios’ “profile”.
The sale will be keenly watched as it is likely to form a blueprint for the next studio due on the block — Lenfilm in St. Petersburg, the sale of which has long been planned to follow Gorky’s.
Mosfilm, the jewel in the crown of Russian film studios, is resisting suggestions that it be privatized for fear that its prime city-center back lot may end up being developed for luxury hotels, casinos and retail purposes.
Gorky, which was long the powerhouse for Soviet children’s and youth movies, produced such Soviet classics as Sergei Gerasimov’s 1957 civil war epic “And Quiet Flows the Don” and Tatiana Lioznova’s 1970s television war film series “Seventeen Moments of Spring.”
Yershov Wednesday said he was “cautiously positive and optimistic” that the long delayed studio sale would go ahead within the next year.
“Although the government has decided to sell 100% of its holding we are optimistic that sufficient safeguards and mechanisms to ensure that Gorky remains a center of film production will be put in place,” Yershov told Variety.
“It is essential that the new owner does not change its profile.”
Up to 15 potential buyers were likely to bid at the auction and more details would be made public Monday at a press conference in Moscow, he added.