Archive for December 31st, 2017


Zhevago takes control of Espreso TV

December 31, 2017

With elections 15 months away, as previous stated by the blog, it is now worth keeping a watchful eye over the Ukrainian media – national and local.

The oligarchy and local vested interests will, by the summer of 2018, have cast their lots – with many of the oligarchy backing several candidates for president (albeit it is in parliament they can do the most damage).

Akhmetov’s Perviy may well get behind President Poroshenko, so too Mr Pinchuk’s ICTV.  Depending upon the conversation in The Netherlands between Prosecutor General Lutsenko and Ihor Kolomoiswky, 1+1 (and others) of the Kolomoisky media empire may also get behind the President (and the PrivatBank issue suddenly be resolved, or the legal ball deliberately dropped post elections).  But who else will they back?

If Mr Zakarchuk runs, (and that will become clear during summer 2018), do they back him too?  Which oligarchs and/or minigarchs will he accept backing from?  (His natural orientation would suggest a bias toward Samopomich and Dem Alliance – perhaps even the Georgians.)

Maybe if Mr Firtash’s business interests suddenly become “easier”, Inter may also be less critical of the President – or perhaps Ms Tymoshenko’s Vienna visit during the summer of 2017 has sealed a deal already?

What of the current Zik media environment?

When Rabinovych fails, will NewsOne be the Tymoshenko platform?  Which media owners will side with whom – and why?

And so it goes on.

When the wives of Messrs Yatseniuk, Knyazhytsky, and Avakov bought Espreso TV in August 2017, a reader would have perhaps understood the purchase to be a TV/media outlet for the promotion of their political futures, or to act as an irritant for the political futures of others.

Media ownership by the political and/or vested business interests both before and behind the curtain in Ukraine is par for the course – as was hiding assets among relatives (and trusted school friends) prior to public e-declarations.

Naturally the usual chain of companies remain involved in any acquisition (sometimes for good reason, sometimes for nefarious reason).

For example, Mr Yatseniuk acquired his shares in Espreso TV via Goldbury LLC, which is owned by Astra Finance.  Astra Finance has Mr Yatseniuk (30%), Mrs Avakov (40%) and Mrs Knazhytskya (7.5%) among the shareholders.  A particularly “People’s Front” orientated business entity.

However, it appears that after 5 months of ownership, Astra Finance has sold 77.5% of the shares in Espreso TV (the shares of Avakov and Yatseniuk) to Atmosphere Entertainment Inc.  The remaining 22.5% of Espreso TV remaining with Mrs Knazhytskya – for now.

Behind Atmosphere Entertainment Inc sits Ivan Zhevago – who ultimately now owns 77.5% of Espreso TV.

Ivan Zhevago is the son of Russian born, Ukrainian oligarch Konstantin Zhevago.

Konstantin Zhevago owns in part or in full, among other things (via “Finance and Credit Group”) – Ferrexpo, Poltova GOK, Kremenchug AutoKraz, CISC Rosava, Omega Insurance, “Salute Hotel” Kyiv,  pert of Yushni Port, “Kievsoyuzdorproekt”, “Biloterkovna teploelektrotsentral”, Ukrenerhosbyt, Odessaoblenerho, Ukrainian-German “Mega-motors”, Luhanskoblenerho, “Kremenchug Factory of Technical Carbon”, Stakhanov Factory of Technical Carbon, LTD. “Ukrtekhuglerod”, Zatisnyansk Chemical Factory, Uzhgorod “Turbogaz”, Kharkov Instrumental Factory, Stakhanov Carriage Works, Berdychiv machine-shop “Progress”, Poltava machine unit factory, Zaliv Shipbuilding, “Kyiv shipbuilding and reconstruction factory”, Skopski Legury (ferro-alloys), electro-metallurgical plant “Vorskla Steel”, electro-metallurgical factory “Vorskla steel Denmark”, “Kievmedpreparat”, “Gemoplast”, “Galichfarm”. and “Kremenchuk Yaso”.

The blog may have missed a few companies, and the now bankrupted Finance and Credit bank was deliberately omitted.  RasGas, an entirely unclear deal involving Qatar, has also been omitted precisely because it is unclear as to the extent of involvement, or whether any agreement is even on-going.

Konstantin Zhevago has, since the 1990s, been actively involved in politics too, beginning in local politics in Poltova and becoming a Yulia Tymoshenko ally upon the national stage – although currently he is in bed with The Radical Party.

In summary Mr Zhevago (Senior) is in politics, chemicals, finance and insurance, real estate, energy, engineering, shipbuilding, food, metals, and pharma – but not media.

It has to be said that as Konstantin Zhevago benefited from a well placed father, so too may his son Ivan.

There is nothing to directly connect Atmosphere Entertainment Inc to Ivan’s father Konstantin (other than a blood relationship – and probably, directly or indirectly, the purchase capital required).

Nevertheless Espreso TV is hardly a major media outlet.  It is certainly not a major revenue provider.  When the Yatseniuk-Avakov-Knyazhytsky (People’s Front) bought it, there was perhaps a fairly clear political rationale for doing so when President Poroshenko (and the then new owners) will need all the “friendly” media he can find in 2019.

It would/could have also acted as a platform for any re-branded reincarnation of the People’s Front (which will be otherwise slaughtered at the ballot box).

The plans for Expreso TV under Mr Zhevago Jr (or Snr) therefore seem somewhat unclear, albeit there is certainly capital to invest in the station.  Nevertheless a challenger to Kolomoisky’s 1+1, Firtash’s Inter, or Pinchuk’s ICTV, is unlikely to be realised any time soon.  It probably won’t even reach the status of Muraev’s (Rabinovych-centric) NewsOne before 2019.

That said, some serious expenditure on licencing for Game of Thrones, The Americans, and whatever else is currently “en vogue” TV, may well rapidly grow audience numbers despite the losses incurred.  Media in Ukraine is not necessarily owned to make money – for often it doesn’t.  It is owned for political reasons.

Is this a matter of Espreso TV no longer being “People’s Front TV” and becoming “Radical TV”?

If so why would (albeit fractious) coalition partners of President Poroshenko sell their TV station before the elections into The Radicals orbit?  After all, where will all those (significant) current People’s Front parliamentarians go if not to Poroshenko’s Solidarity Party (in the absence of creating a new brand, which is probably now too late, less a Groisman factor is included in a new party)?

How does selling a TV station into the sphere of influence of a populist prima donna (and otherwise entirely empty shell) like Oleh Lyashko assist the current coalition prior to 2019?

The answer perhaps, is that swivel-eyed populists Oleh Lyashko and Yulia Tymoshenko fight for the same rural populism-receptive voting constituency.  The thinking perhaps is that every vote Mr Lyashko takes from this community is one less for Ms Tymoshenko – and one which President Poroshenko would probably not have won anyway.

Crudely put, the better Mr Lyashko does in the countryside, the worse Ms Tymoshenko will do – so why not sell a TV channel owned by the coalition to those within his orbit?  At present, President Poroshenko would certainly prefer to face Mr Lyashko rather than Ms Tymoshenko in any second round of presidential voting – so why not add to the Lyashko arsenal?

Time will tell fairly swiftly the true nature behind the sale and purchase of Espreso TV.  It may well be that Ivan Zhevago simply fancies the idea of owning a TV station as a “rich kid’s play thing” – or not.

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