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A Farewell to Russia. Murdoch Quits
February 8, 2011 16:23


Billionaire Rupert Murdoch is going to sell his assets in Russian business. Media mogul will sell News Outdoor, Russian operator of outdoor advertising. As the media and advertising business is a dangerous business in Russia, the company wants to withdraw from the country without the loss.

The mediaholding News Corporation is preparing to announce the sale of outdoor company in February, according to Kommersant magazine. The company will be bought by a pool of investors, among them are VTB Capital, Alfa Capital Partners, Sergei Vasiliev, general director of Video International and STS channel founder Peter Gervy. The transaction is estimated at 300-400 million dollars.

For the first time Rupert Murdoch announced that he was planning to sell News Outdoor in 2007 and then in 2008 he explained why. In the interview to The Financial Times he said: "This is purely me, I’m sorry: the more I read about investments in Russia, the less I like the feel of it. The more successful we’d be, the more vulnerable we’d be to have it stolen from us, so there we sell now". He didn't say what exactly he was going to sell, but that was clear it would be News Outdoor.

Nowadays News Outdoor is the largest company in outdoor advertising in Russia. In June, 2010 the company had over 36,5 thousand advertising constructions. The company also has been working in Ukraine, Czech Republic and Romania.

Rupert Murdoch has been working in Russia for about 10 years and no longer wants to own the company, despite the fact that its not the best moment to sell it.

News Outdoor company was established on the basis of APR-City company, that began its operations in Moscow in 1995, with only 200 billboards. Within five years the company had 8500 billboards and other advertising structures in 75 cities in Russia. The company became the market leader and APR-City began to search for an investor. Soon they were able to go on with Rupert Murdoch, who had been working in Russia together with Boris Berezovsky, establishing "Nashe radio" and advertising agency. Mr. Murdoch approved the idea of the outdoor advertising and singled for the project in Eastern Europe 100 million dollars. Under this project News Outdoor company was established. The controlling stake in the project belonged to News Corporation. According to Wikipedia, is the world's third-largest media conglomerate (behind The Walt Disney Company and Time Warner).

Since that time News Outdoor company has been developing its business quite successfully, hiring officials and former officials to work. The business has been criminalizing rapidly, Russian cities started to blossom with giant billboards and banners.

At the end of 2003 News Outdoor entered the top ten operators of the world outdoor advertising. At that time company was the owner of 24 thousand boards. Big business has attracked a lot of not desired attention. The authorities started to blame News Outdoor in nonpayment of taxes and Russian investigators raided the Moscow offices and production facilities of News Outdoor.

To these scandals another problem was added. According to Vedomosti, the Committee on Publicity of Moscow offers to clean out every city from billboards and banners in two years.

According to the 2010 list of Forbes richest Americans, Murdoch is the 38th richest person in the U.S. and the 117th-richest person in the world, with a net worth of $6.2 billion. So why does he need so many problems with Russian company? And what's the main reason? As Minyanville online magazine says "Russia’s leaders dug a huge hole for themselves with their arrogance and often outright hostility to outside investors".

Sources:
www.kommersant.ru
www.lenta.ru
www.gawker.com
www.telegraph.co.uk
www.minyanville.com
www.wikipedia.org
www.digitaljournal.com


Tags: Russian business     

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