Ruble crisis muffles Russia's free press Economy: Many news organizations have folded or merged, while others have cut their staffs or sold their independence.

September 18, 1998|By Kathy Lally | Kathy Lally,SUN FOREIGN STAFF

MOSCOW -- Newspapers, magazines and television stations are under siege here, fending off a powerful force in the most dangerous battle they have encountered since they began their journey toward freedom 10 years ago.

News organizations that outlasted totalitarianism and censorship are faltering before today's demanding master -- capitalism.

The economy is suffocating them. And some journalists fear that desperation will drive them toward unhappy bargains, forcing more and more of them to exchange editorial independence for financial support.

"The situation is catastrophic," says Konstantin Borovoi, who heads the Economic Freedom Party in the State Duma, or lower house of parliament.

Borovoi asserts that the government already has begun sending signals it is ready to deal. "The government promises to help those who will help the government. Press organs and television companies will not speak up in protest. The crisis has made everyone obedient."

Some properties already are controlled by moguls who use them to express their views, but others, which have fought for their independence by scrambling for advertising or by nimbly balancing the interests of several investors, are worried.

Television advertising revenues have dropped by 50 percent or more this month, the wealthy men who have bankrolled newspapers and magazines have lost millions, printing and production costs have escalated and the wild rise and fall in the ruble has meant that by the time news agents pay publishers, the money is worth hardly anything at all.

Every organization has laid off staff; remaining employees have had their pay cut, sometimes in half, and newspapers have drastically cut back on space.

Press councils

And Communists, emboldened by their success in forcing President Boris N. Yeltsin to withdraw his nomination of Viktor S. Chernomyrdin as prime minister, have begun talking about nationalizing a television network and setting up councils to regulate the press.

The probability is that many of Russia's 23,000 papers and magazines will fold, television is likely to become full of reruns and old movies. Survivors probably will trade today's master for tomorrow's. But no one knows who that is.

Leonid Bershidsky, who edits the paper Kapital and writes a media column, says many publications will not survive the crisis. Even the most popular newspapers are in trouble.

"The economy is already having some effect," Bershidsky says. "Izvestia and Russki Telegraf are merging. These are two high-profile, big-budget dailies."

Megalopolis Express, a tabloid with a press run of 800,000, has been weakened, perhaps fatally, he says. The enormously popular Moskovsky Komsomoletz newspaper, with a press run of more than 1 million, has sent half its staff on unpaid leave.

"It's hurting mostly those with high circulation and big newsstand sales," Bershidsky says. "Printing costs have gone way up, and by the time the retailers pay for the papers, the rubles are worth nothing."

Advertising losses

His own paper is in a serious situation. Last spring, he could count on nine pages of employment ads. Today, he's lucky to have four. The only companies hiring, he says, are movers who are busy packing up fleeing expatriates.

Sergei Lisovsky, who runs Russia's biggest advertising company, says television is about to undergo a dramatic transformation. He says that ORT, Russia's public channel, will be particularly hard hit, reduced to broadcasting a schedule heavy with old programs from its library.

"ORT will be in the worst situation. The advertising budget will fall by 70 to 80 percent, and as a result ORT will not be able to buy programs abroad. The programming on ORT will remind you 1989."

Of course, many Russian publications are not entirely independent now. In an earlier crisis in 1993, when the government withdrew subsidies, the big bankers who control a great deal of Russia's wealth began buying media properties.

They bought them so they could wield influence, and savvy Russians evaluated what they read or heard through the filter of ownership.

"It seems only yesterday that it was so easy to analyze the Russian media," Bershidsky began a recent column. "You knew to whom a television station or newspaper belonged and you easily found where the owner's stand jibed with the media outlet's editorial policy."

Merging of opinion

Now it's harder. Vladimir Gusinsky, for example, owns MOST Bank, which controls the NTV television network and the newspaper Segodnya. Vladimir Potanin, who owns Uneximbank, controls Russki Telegraf and Izvestia.

The financial collapse forced MOST and Uneximbank to merge. Whose views will emerge through the media? No one is sure.

"There's going to be a big shakeout," Bershidsky says, "and we don't know yet who will survive and who will be beholden to whom."

Yuri P. Schekochikhin, a Duma deputy from the liberal Yabloko faction and deputy editor of the Novaya Gazeta newspaper, doesn't think the Communists will be successful.

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