A fight for media control
By Boris Kagarlitsky Posted Jan 1 2000
Russian journalists savored the battle between Vladimir Gusinsky and Boris Berezovsky even before the newspapers and television stations owned by the two media monopolists heaped their latest invective on the heads of readers and viewers. Media observers cynically discussed the causes and potential outcome of the battle.
Before the collapse of the ruble in August 1998, the position of Russia’s main oligarchic groups seemed relatively stable. Most had a similar structure: They were composed of a company that exported raw materials to the world market, a bank that accumulated capital and a media organization that disseminated propaganda about the advantages of capitalism.
The sale of raw materials allowed the oligarchs to import Western consumer goods, which were bought by the members of Moscow’s growing middle class. Funds from the raw materials exports were also set aside for bribing public officials, politicians and journalists.
Gusinsky’s group did not have a raw materials arm and instead developed its media holdings and further cultivated its relationships with politicians. It had a financial arm, Most-Bank, with traditional ties to the Moscow city administration, but it did not have a serious presence in the raw materials sector. Gusinsky’s Most-Media organization included the television company NTV, the radio station Ekho Moskvy, the satellite channel NTV+, the daily newspaper Segodnya and the weeklies Sem’ Dney, Obshchaya Gazeta and Itogi, a joint venture with Newsweek.
In 1996, the Russian media, with the support of the oligrachs, unleashed a powerful campaign supporting incumbent President Boris Yeltsin. The media campaign played a substantial role in deciding the election outcome, and, following Yeltsin’s victory over the Communists, the united bloc of oligarchs fell apart.
Berezovsky gained control of large numbers of shares in two television channels: ORT and TV-6. He sponsored the newspaper Nezavisimaya Gazeta and the magazine Ogonek, and he gave credit guarantees to the money-losing newspaper Novie Izvestia.
Berezovsky has never tried to acquire total ownership, or even a controlling stake, of a media outlet. His power rests on personal relations with editors and journalists. As one Moscow entrepreneur put it, “Gusinsky buys newspapers, while Berezovsky buys people.”
Berezovsky claims that, as a shareholder, he has never interfered with the media. He has cultivated ties with the Kremlin and developed increasingly close relations with Yeltsin’s daughter and adviser, Tatyana Dyachenko.
In 1999, Alexander Voloshin, Berezovsky’s former business partner, became head of the presidential administration. Together, Voloshin and Berezovsky had collected money from the population to produce a “people’s car.” Not a single car was produced, but Berezovsky and Voloshin became noticeably richer.
The collapse of the ruble in August 1998 brought dramatic changes. Resources that seemed limitless were now exhausted. Investment funds had to be obtained somewhere. Energy and finance groups became weaker. The ambitions of local leaders grew, and they took larger roles in the mass media.
Moscow Mayor Yuri Luzhkov openly declared his goal of heading the country and founded the party Otechestvo (Fatherland). The party’s ideology combined Russian nationalism, corporatism and the cult of the “strong leader.” An agreement to cooperate was quickly reached between Otechestvo and Tatarstan President Mentimir Shaymiev’s group Vsya Rossiya (All Russia). They developed a strong influence over a powerful media network that included virtually every Moscow-based periodical, the television channel TV-Tsentr and the satellite channel Meteor-TV. Luzhkov even set up his own weather service. Gusinsky’s Most-Media attached itself to Luzhko. The presidential office, through Berezovsky, controls state and other media outlets.
In August, Western publications began running articles on Kremlin corruption, such as money laundering in U.S. banks.
Reports appearing in the West are often taken as a political signal in Russia. The New York Times’ articles on money laundering of Russian funds in the Bank of New York was viewed by Russian leaders as a sign that Washington is anxious to see Yeltsin replaced. Yeltsin and his team, however, are not about to pack up and go. The change of mood in the West is perceived as treachery. Many of the “democratic” features of the Russian regime have survived until now because they were necessary for winning favor in the West. This may no longer be the case.
There is little evidence for it at present, but the fear is strong that if the Kremlin group holds power, it will be at the price of restricting civil liberties. If Luzhkov gains power, the results may be the same or worse. Russia’s media wars result from press freedom. Ironically, one of their unintended consequences may be the restriction or loss of freedom.
But capitalism will remain.