U.S. investment banker Boris Jordan, the new chief executive officer of Russian television network NTV, will have a tough time convincing the world that the channel he has taken over will remain independent from state interference. Appointed in a boardroom coup on Apr. 3 by NTV shareholder Gazprom, the Russian gas giant in which the government is the largest stakeholder, Jordan moved his security team into NTV's offices at dawn on Apr. 14. Dozens of the station's leading journalists refused to sign off on a statement ceding control to the new management. Instead, they walked out to protest what they called a Kremlin coup to muzzle the channel's vocal criticism of government policy (see BW Online, "We're Sure the Channel Is Under State Control"). Now it appears Russia is without a nationwide TV network free from Moscow's supervision.
In a room in the station's Moscow headquarters, next to the sealed-up office of ousted General Director Yevgeny Kiselyov, Jordan met on Apr. 16 with BusinessWeek Moscow Bureau Chief Paul Starobin and Correspondent Catherine Belton. During the conversation, Jordan insisted several times that the company will have a truly independent future under his command. Here are edited excerpts from their conversation:
Q: Many Russia watchers say the takeover of NTV was a political move to clamp down on the channel's independence and that this was more than a solution to a business issue between Media Most, [NTV's parent company], and its creditor Gazprom.
A: This company was never independent. Let's make that clear. NTV was used as a political instrument and as a commercial instrument for the benefit of Mr. Gusinsky [the founder of NTV and the media mogul who heads the Media Most empire]. And at times it worked for the benefit of the Kremlin. That's what we are going to change. This company will now truly be an independent TV station.
The whole freedom-of-speech argument is a flag Mr. Gusinsky is trying to wrap [around] himself, to avoid the real facts: He had financially drained his company, and he got it into masses of debts. When he disappeared, the creditors stepped in and have taken control of the business.
I don't believe you have to be for or against the Kremlin. You have to report the news independently, you have to report the news the way it is. You have to report it the way we do in the U.S.
Q: But critics say actions against the channel taken to date, including dozens of raids by the tax police and federal prosecutors, culminating in the takeover, are politically inspired.
A: I wasn't involved in that. But I want to give you two sides of the picture. On the one side, I want to give you my view as just a businessman. You have massive money flows that have vanished, shareholder flows that have vanished, no audits. You have shell companies around the world. The trademarks of NTV are owned by offshore companies.
No one understands where any of the assets are. This is what's called asset stripping. This company would have [fared] a lot worse in tax raids in the United States. People would have gone to jail in the U.S. over what took place in this company.
On the other side, there's no question that there's conflict between Mr. Gusinsky and the Kremlin. He backed a different political group than others did, and there's conflict. But I...want nothing to do with the politics. It doesn't interest me. I want to remove NTV from politics. I want NTV to do what a good independent network has to do, and that's what I'm going to build.
Q: One of the reasons for skepticism is that Gazprom is controlled to a large extent by the state. Will they influence editorial policy?
A: The only way anyone can influence the editorial policy of this company is if they come to either Tatyana Mitkova, editor-in-chief elect, Vladimir Kulistikov, editor-in-chief, or myself and say: "We want to do it this way or that way." The day they do that, they will lose all of us. So...nobody's going to come because they know that if they lose us, they've got nothing. I would never have taken this on otherwise.
I specifically went to see Mr. Sheremet, the deputy chairman of Gazprom, and I said I will not tolerate this. My personal opinion is...Gazprom is going to sell. For Gazprom, actually owning a truly independent media company is a real problem. That's because the minute we come out criticizing Moscow Mayor Yury Luzhkov or Russian President Vladimir Putin, Gazprom could get called up -- that's the way the Russian government is. Gazprom...[doesn't] need a media company -- especially a hot potato like NTV. And I'm only going to encourage that.
Q: What are your plans for the company?
A: We're bringing in PricewaterhouseCoopers or Ernst & Young. And our own financial staff is trying to get an idea of the financial picture. I'll tell you it's very difficult. There haven't been any audited accounts for two years. There are numerous debts: to programmers, to journalists, in particular journalists abroad, to Russian banks, to movie producers, sitcom producers.... There's no money in the accounts.
As soon as we've finished with the international audit of the company...and we've taken care of working capital, my strategy is to stabilize the product and create over the summer a new image for NTV: new programming, a new approach to journalism...to everything. That will be led by myself and by the editorial board. And we hope by Sept. 1 to come out with the new NTV.
As soon as we've completed our audits, we'll either attempt to negotiate with the creditors for a conversion of debt to equity or try to raise some capital -- either through financial capital or through strategic capital. Strategic investment for me is not a question of money. You can always find money to build a TV station.
Strategic investment is a question of two things: One is the people they can bring in to help us with the quality of the programming...the right research on what the market needs, the right streamlined management approach.... Management and content are one big issue.
The other is the security of independence. Those are the two things that I'm interested in. Money is No. 3.