Prospects in pay-TV
In March 2016 the holding “Gazprom-Media” has bought a 7.5% stake in National media group (NMG). This follows from the disclosure of Gazprombank, which owns 100% of “Gazprom-Media”. The amount of the transaction amounted to 11.2 billion rubles, the document says. Thus, all national media group was valued at 148,32 bn (€1.9 billion at the exchange rate on 31 March 2016, or $2.2 billion).
The seller’s name has not been disclosed. The volume sold of the package coincides with the ratio of shares in NMG, owned by the founder of Volga Group Gennady Timchenko. Businessman in 2013 has gained just 7.5% of the shares of the media group RTL in Luxembourg, wrote. The transaction amount was €81 million, and the entire MWF, it turns out, was valued at €1.08 billion, “I have funded projects related to the media assets, but they interested me solely from a commercial point of view, did not consider them as a tool of influence,” said Timchenko in August 2014 in an interview with TASS on its investment in NMG. He then emphasized that directly owns a “very small percentage” in MWF.
To receive the comment of the representative Timchenko has not yet succeeded. MWF representative confirmed the deal but did not disclose details or the name of the seller. General Director NMG Olga pascin has not responded to a call of the correspondent .
The representative “Gazprom-Media” declared that the holding is interested in diversifying its business through partnership with players of the media market. Deal with National media group appreciate as an investment participation that will allow to respond effectively to market changes.
“Business LMWH has significant potential, in particular in the promising segment of pay TV, — said the representative of “Gazprom-Media”. We also expect that equity participation in the company will enable the exchange of expertise and to cooperate in the creation of original content and distribution”.
National media group was established in 2008 through the merger of the assets of the Bank “Russia” Yury Kovalchuk, SOGAZ, “Surgutneftegaz” and the Chairman of the Board of Directors of “Severstal” Alexey Mordashov. The ownership structure of MWF is completely unknown. Last time MWF has disclosed its financial results for the year of 2014 when the holding company’s revenues under RAS amounted to 3 billion rubles, net loss — 617 million roubles Under IFRS for the year 2013 revenue amounted to 14.7 billion rubles., operating profit amounted to almost 2.4 billion rubles., net profit — RUR 1.5 bln.
At the end of March 2016 at MWF new Director: is Alexander Ordzhonikidze (head of the group since 2009) was appointed Olga pascin, who led the Discovery Networks in North-Eastern Europe. The reasons of personnel shifts in the company did not disclose. In CGM include “channel five” (the group owns 72,4%), channel one (25%), REN TV (68%), Izvestia (73,2%) and radio station “Russian news service” (100%). The group has also been running newspaper “Metro-Petersburg” in St. Petersburg and acquired a 25% stake in the founder of the newspaper “Sport-Express”. In March 2014, NMG repurchased 50% of the share capital of “Art pictures vision”, part of the group of companies “Art pictures”.
In 2015, agreements were reached on partnership with large foreign companies in the pay TV market: the Discovery group, Viasat and Turner. Discovery Networks under the direction of Paskanoi first agreed to establish a joint venture with NMG — now it manages the Russian version of TV channels Discovery Channel, Animal Planet, TLC, Eurosport, etc. as a result of these transactions and partnerships MWF now controls about 20% of the market of paid TV in Russia. According to a source close to the holding, only in the last quarter of 2015 MWF revenue increased by 150 million rubles., including through partnerships with Discovery.
National media group said the deal with “Gazprom-Media” was estimated at more than eight times more expensive than holding “CTC Media”, which includes the TV channels CTC, “Home”, “Che” and CTC Love, as well as an online service “Videomore”. Over 75% of Russian business “STS Media” Alisher Usmanov and Ivan Tavrin in February 2016 paid $of 193.1 million Thus, all business of the company was estimated at $257.5 million (20 billion rubles).
The cost company “CTC Media”, which is traded on the NASDAQ, plummeted in connection with the political events, the fall of the ruble and especially the law limiting foreign ownership in the media. In September 2014, when the state Duma were amended to the law “On mass media”, capitalization of “CTC Media” on NASDAQ equaled almost $1.5 billion.
In 2014 “Gazprom-Media” led by Mikhail Lesin acquired the assets of ProfMedia holding (TV channels TV3, “Friday!” and “2×2”, “Autoradio”, “Romance”, “Humor FM”, “Energy” and the film company “Central partnership (for both)”) for $603 million (or 21,03 billion rubles at the exchange rate at April 2015). In rouble equivalent of the national media group was valued at seven times more expensive than the assets of ProfMedia.
In the opinion of Raiffeisenbank analyst Sergei Libin, an evaluation of the National media group in 148,32 billion rubles, that is ten times more the last take in all that revenue under IFRS or 50 times earnings for 2014 under Russian accounting standards, is very high for industry media, even though in the past financial results of CGM are not taken into account yet paid non-terrestrial channels. “We have no public market for such companies, so the asset is worth so much, how many the buyer is ready to buy and the seller agrees to sell, said Libin. Is a private, non-market transaction. I think the market prospects of pay-TV it all has an indirect relationship”.
The revenue of “Gazprom-Media” by the end of 2015 reached 73.6 billion roubles, which is 2% higher than a year earlier, follows from the statements of Gazprombank. Advertising revenues increased 3%, to 57.3 billion rubles In the portfolio of “Gazprom-Media” — broadcasting TV channels (NTV, TNT, 2×2, TV3, “Friday!”, “Match!”), radio stations (“Echo of Moscow”, “Autoradio” “Humour FM” etc.), satellite TV operator “NTV-plus” and its non-terrestrial channels, video services Rutube and Now.ru, marketers and content producers.