Nation’s news media: Free or still captive to their owners?

Ukrainian oligarchs are voracious collectors. They have gobbled up state assets, acquired contemporary art and turned themselves into media barons. While all of these may be good investments, media monopolization has special value – particularly ahead of elections.

“Very few owners treat media as business in Ukraine, though it does bring profit,” said Otar Dovzhenko, deputy editor of Telekritika, a media watchdog magazine. “Instead, they force the media to serve their interests.”

Media outlets owned by a handful of Ukraine’s richest men reach roughly 80 percent of the national audience, Telekritika estimates. The upshot is that the nation’s media are diverse, though still far from free. Self-censorship, implicit advertising and failure to cover the tough issues are just a few of the lingering ailments.

“There’s less political censorship,” said Nataliya Ligacheva, Telekritika’s chief editor. “But it’s difficult to say the media are free and democratic when there is monopolization of interests in the hands of politicized corporate groups.”

Ukraine’s three richest businessmen – Victor Pinchuk, Rinat Akhmetov and Ihor Kolomoisky – are, unsurprisingly, the country’s three largest media owners.

Their outlets’ next big chance to shape public opinion will come in the run-up to the early parliamentary election that President Victor Yushchenko has called for Dec. 7.

Pinchuk, Ukraine’s second richest man and son-in-law to former President Leonid Kuchma, owns a media empire of five TV channels, including ICTV, STB, Novy Kanal, M1 and M2. Together they accounted for more than 24 percent of total viewing audiences in the first nine months of 2008, according to data from GfK Ukraine, a market research company.

Pinchuk’s portfolio also includes the Fakty i Kommentarii daily newspaper, whose declared daily print run of more than 780,000 is Ukraine’s highest.

The media holdings belonging to Rinat Akhmetov, the country’s richest man, include the Segodnya daily national newspaper. With a declared print run that tops 169,000 copies, Segodnya is one of the country’s most popular dailies.

Akhmetov has also invested heavily in the TRK Ukraina television channel that has made the transition from regional channel in Donetsk to national player with studios in Kyiv.

Ukraina has hired foreign media managers, secured broadcasting rights for national football team matches and recently recruited TV star Savik Shuster to host a nightly political talk show. The Donetsk oligarch’s bold moves are helping his station to gain ground on market leaders Inter and 1+1.

Ukraine’s third richest man, Ihor Kolomoisky, also boasts television and print media assets.

He controls a 3 percent share of Central European Media Enterprises (CME), which owns 1+1, the second most popular channel so far in 2008.

The 1+1 channel is not the only medium where Kolomoisky can potentially exercise his influence. He also with partners has interests in TET TV, Glavred magazine, UNIAN news agency, Telekritika and Profile magazines, according to media reports.

But the biggest mystery remains the real ownership of UA Inter Media Group, the largest holding in the country. The group includes Inter, the leading national channel with more than 20 percent audience share, NTN, K1, K2, Megasport, Enter Film, Enter Music TV channels, and the Ukrainian News agency.

While billionaire Valeriy Khoroshkovsky is the reported proprietor, observers name Dmytro Firtash, co-owner of RosUkrEnergo gas intermediary, as the person behind the scenes. “Obviously Firtash is involved there, but the exact extent is not known,” Dovzhenko said.

The concentration of ownership is not unique to Ukraine, but the lack of transparency is a major problem, said Marta Dyczok, an associate professor of the University of Western Ontario who specializes in Ukrainian media. “It’s a question of accountability. In the West, it’s clear who owns what.”

The primary interest in media is the enormous political influence it offers, Ligachova said, identifying a simple but effective chain: “Politicians talk to [media] owners, who influence station managers. Managers then tell journalists what to report.”

Censorship is still prevalent, but it’s not as straightforward as it used to be, she said. “They don’t ban. They pay.”

“Dzhinsa” is the industry buzz word for paid-for news. “Often a lot of money is paid for something not to be reported,” Ligachova added.

This is a vast improvement over 2004, when direct political censorship still existed under president Kuchma. His chief of staff, Viktor Medvedchuk, maintained control over the media by sending editors and journalists daily instructions called “temnyky” – orders on what news to cover and how to cover it. “In the early 90s, people were learning investigative journalism, but censorship got worse and worse under Kuchma,” Dyczok, the Canadian professor, said. She said the best journalists “either gave up or sold out.”

Most national media during the 2004 election campaign was biased against opposition candidate Victor Yushchenko. Only Channel 5, owned by his friend Petro Poroshenko (now head of the central bank’s supervisory council), offered support to Yushchenko.

But a breakthrough occurred when many journalists refused to report the fraudulent results that declared the Kuchma-backed candidate, Victor Yanukovych, the winner. The subsequent protests that started the Orange Revolution also marked a turning point in Ukraine’s media history.

“Political censorship disappeared overnight,” Dyczok said. “Speech became more or less free.”

But not for long, journalists add.

“During the recent Kyiv mayoral elections, politicians bought media loyalty wholesale,” said Yegor Sobolev, an independent journalist. “And there is no one to resist this [political money]. Media owners and managers usually stand for it, while journalists don’t find the will and conscience to unite and stand up against it.”

Sobolev said large media owners do not spend too much time worrying about the reputations of their media assets, when their financial wellbeing depends on business and political interests.

Such factors as viewer trust and quality of product pale in comparison, said Sobolev, who quit Channel 5 last spring, citing lack of freedom.

Protection and promotion of corporate interests are centerpieces of the agenda, agreed Dyczok. “Advertising is hidden in news reports. For example, a bank can be advertised through interviews and made to look like a news story. It can be subtle.”

Reporting is often tailored to the interests of a media owners’ support base, Ligachova said.

“There is certain pluralism, but there is a difference in emphasis.” And the differences in emphases are often clear.

Akhmetov’s Segodnya, for example, promotes an anti-NATO, pro-Russian agenda that is popular in the Donetsk region, where his business empire is primarily based. A report about NATO in March ironically called Yushchenko “that great geo-politician of modernity.” When NATO declined to grant Ukraine a membership action plan in April, the chief editor wrote a blog mockingly titled, “Well, sonny, did your NATO help you?”

But an alternative view on NATO was available because Pinchuk’s STB channel took a more positive view of the summit in April. One report reiterated: “It’s not a refusal. Ukraine will be in NATO.”

There are signs of improvement. Huge potential advertising revenues are forcing more businesslike approaches. The All-Ukrainian Advertising Coalition estimated the total investment in media advertising for 2007 at slightly more than $1 billion, a 25 percent increase from the previous year.

Dyczok said that market forces are starting to drive the sector, although the influence of owners remains strong.

Ukrainian reporters, speaking on condition of anonymity, confessed to practicing self-censorship. One journalist admitted refraining from interviewing anyone “who might say something negative on a subject you’re not supposed to write anything negative about.”

Another journalist, from Glavred Media holding, said: “There have been cases when some journalists offended owners, so then the stories were edited or not published, but journalists were not fired.”

Market forces can also lead to the tabloidization of news by sacrificing serious analysis for sensational reporting.

“There’s not one television channel where you can find out what is actually going on. And there are only a few good newspapers,” Ligachova, the Telekritika chief editor, complained.

But Ukraine is not alone in this respect. “The sensationalization of news is happening everywhere,” Canada’s Dyczok said. “There’s a focus on style over substance.”