As the well-known Engish screenwriter, Dennis Potter, was in his last days, dying of pancreatic cancer, he agreed to an interview on television.
There he said: “I call my cancer Rupert. I would shoot the bugger if I could.”
Potter was speaking of Rupert Murdoch, the media proprietor. Five years after Potter’s death, in a meeting in Moscow between Prime Minister Yevgeny Primakov and Boris Berezovsky, Primakov took some of Potter’s advice.
In Moscow, Murdoch has his foot stuck in one of the most malodorous of influence-peddling scandals. The outcome of that is likely to be new parliamentary legislation banning foreign shareholding in Russia’s state-owned television networks; and maybe new limits On the airing of American-made films and television entertainment, like those produced by Murdoch’s Twentieth Century Fox division.
Gennady Volkov, deputy chairman of the information policy and communications committee of the Duma, is the pro-government deputy who drafted the foreign shareholding ban. He said his measure isn’t aimed at Murdoch. “I absolutely don’t care whether it’s Murdoch or someone else. There should be no foreign shareholders” in Russia’s Public Television Network (ORT),” Volkov says.
He adds that the legislation is on a fast track for adoption by the Duma, because the deputies are concerned that Murdoch could capture 20 per cent or more — the single largest individual shareholding of the network from Berezovsky, and from the state.
Murdoch had been reluctant to enter Russia for years, spurred by his former wife’s Latvian-born animosity towards Moscow. So his move into Russia with Berezovsky as his partner was a surprise when it became public last year. That was when the two announced a plan to buy a 38 per cent stake in Russian telecommunications providers in St Petersburg and Moscow, from Cable & Wireless, a London-based company. They then launched an FM radio station in Moscow.
This was followed by an announcement that Murdoch and Berezovsky were taking over Premier SV, the powerful advertising agency which had monopolised the sale of airtime on ORT. Sergei Lisovsky, who headed Premier SV, was closely connected with former First Deputy Prime Minister Anatoly Chubais, the manager of Yeltsin’s last presidential campaign, and a rival of Primakov’s move to succeed Yeltsin.
Lisovsky’s company lost heavily last year, when advertisers cancelled contracts in the wake of the Russian financial crisis in August. Lisovsky was recently raided by police investigating allegations of tax crime.
The contraction of advertising sales also hit ORT’s revenues,prompting a bankruptcy application against the network to a Moscow court this month.
The Russian government, which holds 51 per cent of ORT, has reportedly been considering a loan of $100 million i or more to the network, repay ment of which would be secured by a 10 per cent bloc of state shares, and by another 10 per cent bloc of privately held shares. Berezovsky is the most powerful of the private shareholders in ORT, who hold 49 per cent in a consortium arrangement Two of the banks in the consortium became insolvent after last year’s crash.
Volkov has acted, he says, to prevent ORT and the government intentionally defaulting on the loan, enabling Murdoch to take over. The proposed new law would also prevent Murdoch consummating his takeover of Lisovsky ‘s ad agency.
The fate of the state shares of ORT may be decided only through adoption of a special federal law. No shares, neither private, nor state-owned, can be transferred to foreign shareholders,’ Volkov has declared
So far, the government hasn’t given the Duma its official opinion of Volkov’s legislation. But the session between Primakov and Berezovsky, reportedly on January 26, left no doubt about what that is. Primakov has rejected Murdoch.
If parliament passes the legislation, and Yeltsin is obliged to sign it into law, the political slap in the face for Murdoch will be one of the sharpest he’s received in years. Those of his advisors who urged him to do business with Berezovsky are likely to suffer a quicker fate than Berezovsky himself.