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Reality TV in a Russian Boardroom

When Moscow-based American financier Boris Jordan took the helm of Russian independent TV station NTV in the spring of 2001, he was brimming with optimism. His plan: to lead a management buyout of NTV from its new parent, gas titan Gazprom, and make the feisty but bankrupt network a beacon of financial and editorial independence. "Gazprom is in the gas business--they don't need a media company, especially a hot potato like NTV," an excited Jordan told BusinessWeek back then. "This is an opportunity in which I can use my skills as a financial manager, my skills in starting up businesses, and my 10 years of living in Russia to build an incredibly large media company--one that is built on principles we accept in the West."

It didn't quite work out that way. Nearly two years later, Jordan, 36, is out of a job, abruptly fired by Gazprom on Jan. 17 from his post as chief executive of Gazprom-Media over what Gazprom calls differences of strategy. Jordan, in fact, did restore NTV to profitability, but he could not wean the station away from its opaque, state-controlled parent. Gazprom, 38%-owned by the state and with a government majority on its board, still controls NTV.

The lesson, in part, is that the government of President Vladimir V. Putin, which owns Russia's two other main channels, is reluctant to cede influence over the airwaves. Putin criticized Jordan's NTV for its relentless coverage of the takeover of a Moscow theater by Chechen terrorists and the subsequent bloodbath. Now that Jordan is gone, there is a danger that NTV could become a mouthpiece for the Kremlin with parliamentary elections coming this fall and a presidential election in 2004.

But there's more to Jordan's ouster than lofty free-press issues. This is also a business story, a tale of an ambitious dealmaker who overestimated his own abilities and underestimated his opponents. Jordan, a former Credit Suisse First Boston Corp. banker of Russian descent, advertised himself as a bridge between high-profile investors in the West and the murky world of politics and money in Russia.

In this case, the bridge collapsed. Jordan, who prides himself on being a master salesman, couldn't pull off a management buyout. He says he assembled backing for such a deal from Western investors, including a prominent global media company which he declined to name. The problem, he said, was that Gazprom CEO Alexei B. Miller never spelled out the terms of a transaction.

Jordan also never mastered Gazprom's byzantine corporate politics. He failed to tend a key relationship with Alexander Dybal, 36, the ambitious chairman of Gazprom-Media, the holding company of NTV inside of Gazprom. Dybal, who last week was named Jordan's replacement as CEO, says that Jordan was ousted because he didn't keep Gazprom apprised of key components of his business strategy for the company's media holdings. "Our controversies were about how to manage the business," not about politics, Dybal says. On Jan. 22, one of Dybal's deputies, Nikolai Senkevich, was named acting director of NTV.

Undoubtedly, things were never going to be easy for Jordan at NTV. He took the job after Gazprom forced the ouster of NTV founder and fierce Putin critic Vladimir Gusinsky, now living offshore. Skeptics assumed he would turn NTV into a Kremlin puppet. That didn't happen. NTV bravely reported on sensitive topics including military corruption.

Under Jordan's stewardship, Gazprom-Media's finances improved, too. Last year, the unit recorded a profit of $495,000 on revenues of $237 million; back in 2000, it lost $35.3 million. At NTV, the core asset of Gazprom-Media, revenues shot up from $70 million in 2001 to $127 million last year. "I'm handing down a business that's profitable for the first time in its history," Jordan says. "It's just that I don't own it." He denies keeping Gazprom in the dark on his strategy and declined to comment on whether political considerations led to his ouster.

There's no need to weep for Jordan, though. He can expect a "considerable" sum for departing early from his contract with Gazprom, Dybal says. "Sometimes they work out, and sometimes they don't," Jordan says of business deals. His immediate plans are for a vacation in America--and then back to the high-wire dealmaking arena in his adopted city. By Paul Starobin in Moscow

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