Meet Ukraine’s Media Moguls

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This article first appeared on

Russia’s advance into Crimea has transformed Ukrainian television news coverage

By Alison Langley

Ukrainian media mogul Dmitry Firtash walked out of pre-trial detention in Vienna last week, where he was arrested on bribery and suspicion of forming a criminal organization after paying a record-breaking 125 million euros ($173 million) bail.

There was a time when Ukrainians might not have heard anything about Firtash’s arrest or his fight against extradition to the US on Inter TV—one of the country’s most viewed TV networks—because it and other Inter Media Group channels are owned by Firtash, who previously had operated Inter TV as a mouthpiece for a government that was seen as corrupt.

“It has a long history of being a tool for propaganda,” said Brian Bonner, the editor of Kyiv Post, an English-language news site in Ukraine. “I tuned out a while ago.”

Perhaps, says Vitaliy Yarynych, executive director of Telekritika, a media-monitoring group in Kyiv, Bonner may want to give Inter TV another chance.

Although the 48-year-old oligarch may have once had close ties to the Kremlin, which allowed him to amass a fortune, Firtash is also a businessman and a patriot. As then-Prime Minister Viktor Yanukovych was leaving town Feb. 21 under cover of darkness and Russians were rolling into the Crimea, Inter TV’s coverage of the uprising changed profoundly, Telekritika’s monitoring found.

Inter TV, which has a 24.5 percent audience share, is not alone. Telekritika noted profound changes in nearly all the channels it monitors. That’s important because television reaches 90 percent of Ukrainians, compared with 42 percent of citizens who regularly use the Internet.

“They seemed to know the situation. They changed. Now they are [reporting] critically and fairly. It’s much better,” Yarynych said.

Five wealthy businessmen in Ukraine tightly control not only the nation’s economy, through extensive holdings in all major industries, but also the flow of information. “It’s one of our biggest problems right now,” Yarynych said. “All over our television channels are privately held and funded by … oligarchs who use their position of influence to articulate their views to audiences.”

Once Moscow took control of the Crimea peninsula and replaced five Ukrainian channels with Russian programming, however, the businessmen also became strong patriots.

Take, for example, ICTV, with 22 percent market share, which is owned by billionaire Victor Pinchuk, a darling of the west for his philanthropic giving. “We were in shock,” Pinchuk, 53, told Forbes. “To see death as it happens, live on the air, is horrible.” His team also provided medical supplies to the wounded in the Maidan. “My thoughts were with them all the time,” he said from his apartment in London.

The country’s wealthiest man, Rinat Akhmetov, who famously lives in the most expensive flat in Britain, owns Ukraine’s third most important channel, Ukraine TV. Forbes estimates his wealth, as of Mar 2014 to be $12.5 billion.

Akhmetov, whose business holdings control nearly half of the country’s coal, steel, ore, and thermoelectricity sectors, said in a statement to the FT, “The future of our country has been put under threat. The use of force and lawless actions from outside are unacceptable.”

Igor Kolomoisky, owner of 1+1 TV, not only directed his channels, which have nearly 11 percent of market share, to begin more balanced coverage early on, he accepted an offer from Kiev’s interim government to head the regional government in his native Dnipropetrovsk region in eastern Ukraine, where he controls a large share of industry and other businesses.

“I agreed, because the homeland is in danger,” Mr Kolomoisky, a prominent member and supporter of the country’s Jewish community, told the Financial Times.

The notable exception to the remarkable turnaround in reporting was Channel 5, seen by only 1.4 percent of the nation. That’s because they have always had the most balanced coverage, Telekritika said.

Channel 5, which broadcast live from Maidan at the height of this winter’s protest, is the opposition television network which helped fuel the Orange Revolution ten years ago. Not surprisingly Channel 5’s owner, Petro Proschenko is the front-runner for president in this May’s election.

Because Inter TV is the most watched station in the country—the channel carries European Football and has rights with international production studios like Pixar to show films—Firtash, who Forbes estimates is worth $673 million, but a US State Department memo on WikiLeaks estimates in the billions, carries the most influence in the communications field.

US authorities say they have been building a case against him since 2006. In an emailed statement released by his lawyers, Firtash said he is a pawn in geo-politics. A Vienna criminal court now has to decide on a US extradition request for Firtash.

While he made his fortune in shady gas and oil deals, according to US State Department memos published on Wikileaks, he began to diversify in the early part of the millennium, purchasing banking and media holdings via his company Group DF, whose offices are in Vienna.

The structure of Inter Media Group is murky, but Firtash is believed to have first sold a 61 percent stake in 2005 to Valeriy Khoroshkovsky, who at the time was the head of Ukraine’s National Security Service and later became first deputy prime minister. In 2007, Khoroshkovsky named his wife as head of the media group.

A slew of journalists resigned over the political control. This was true not only for Inter TV’s newsroom, but also for the other stations as well, as stories critical of the ruling party were quashed, Yarynych said.

After years of being accused of abusing his power to control the country’s airwave, much of that criticism by Telekritika as well as the opposition, Khoroshkovsky sold his shares in February 2013 back to Firtash. De-throned from power, Khoroshkovsky now lives in London.

With Firtash consolidating his power, the political interference does not appear to have immediately improved Inter’s reporting. In December 2013 and January 2014, when pro-Europe demonstrations heated up at Maidan Square, Telekritika’s monitoring found that Inter TV and many of the other pro-government channels largely did not cover events. More journalists left newsrooms “in the spirit of Maidan,” Yarynych said.

When the stations did report on the uprising, programming was skewed to reflect the view of the government then in charge. A survey conducted for Telekritika from Jan. 31 to Feb. 24, by the International Institute of Sociology found that only 38 percent of Ukrainians found Inter TV to have balanced coverage.

Not surprising, the channel’s favorability rating was highest in the regions with strong ethnic Russian populations. Some 57 percent of respondents who lived in the east, for example, said Inter TV provided “objective and unbiased news about the Maidan uprising.”

But coverage changed when the Russians moved into Crimea.

“Firtash, as with many other Ukrainian oligarchs, are among those who are interested in the integrity of Ukraine and oppose Crimea annexation,” Yarynych said.

While some commentators, like Kyiv Post, say the change of heart is due to patriotism, Yarynych believes their business interests play a factor. All five channels lost a large audience share and a chunk of advertising when it lost Crimea. But the oligarchs also lost in other business interests, too.

Russian riot police took control of a Poroshenko warehouse in the southwest part of the country, essentially derailing the company’s extensive Russian distribution network. All the oligarchs stand to lose not just in Crimea, but in other parts of Ukraine with strong ethnic Russian populations.

The channels are owned first and foremost by businessmen “who want to be in good graces with the government,” no matter who the government is, Yarynych said. Ukraine’s business establishment wants to keep the country united to preserve their holding nation’s territorial integrity.

“This is among one of the reasons of change of news policies of the channel we currently observe; among other clear reasons of demonstrating loyalty to the new government,” Yarynych said.