After already acquiring an outdoor billboard company, News Corporation’s head may be interested in buying more
Australian-born media mogul Rupert Murdoch met with Ukrainian President Viktor Yushchenko in Kyiv on June 21, about three weeks after his media company News Corporation closed its first acquisition in Ukraine and obtained a controlling share in an outdoor advertising company.
A statement released by the president’s press service revealed that both discussed Ukraine’s media market. Yushchenko voiced Ukraine’s desire to attract “serious investments” in the sector, which today remains largely controlled by influential Ukrainian business-political groups who have used their command over the outlets for personal gain, rather than for objectively informing the public.
Yushchenko told Murdoch, who is 74 years old, that Ukraine was dedicated to ensuring freedom of the press and competition on the media market.
Murdoch, who controls and serves as chairman of News Corporation, told Yushchenko that he was closely watching events in Ukraine during and after the so-called Orange Revolution, adding that the international community has high hopes for the country’s new administration.
Reports published earlier this year in the U.K.-based newspaper Telegraph alleged that News Corporation was close to acquiring an outdoor advertising business in Ukraine, marking its first step into the country.
A top executive at News Corporation told the Post on June 22 that his company had closed the acquisition several weeks ago, acquiring a small yet promising billboard company which operates under the AURUM brand through a Moscow-based subsidiary called News Outdoor Group.
“We are looking for other opportunities in Ukraine, particularly in expanding our outdoor advertising business, moving into television, paid television, cable and satellite television,” he said.
“We are not so interested in acquiring print media, as we limit our print media business to English-language publications,” he added.
News Corporation is a diversified global media and entertainment company that controls the satellite networks BSkyB in the U.K., Italy’s Sky Italia, the FOX television network in the United States and National Geographic. The corporation also publishes more than 175 newspapers worldwide, including Britain’s oldest daily, The Times. The film studio 20th Century Fox and HarperCollins, one of the world’s leading book publishers, are also controlled of News Corporation.
News Outdoor Group’s annual revenues are in excess of $200 million. The addition of AURUM’s billboard business beefs up the group’s already strong presence in the Eastern European market, which includes operations in Bulgaria, the Czech Republic, Hungary, Poland, Romania and Russia.
Like many sectors in Ukraine’s economy, the billboard market, though small, has grown rapidly in the past few years. Recent political developments have further lifted investor appeal.
According to industry experts, Ukraine’s outdoor advertising market grew by about 25 percent last year to some $85 million, and is expected increase this year to some $100 million.
There are currently about 700 outdoor ad operators on the Ukrainian market, 250 of which are active. The rest are companies that place ads of these kinds occasionally for themselves, such as banks and supermarkets, but do not specialize in the market.
The arrival of News Outdoor Group is expected to shake up the market.
Russell Hoare, an executive at News Outdoor Group, told the Post that AURUM currently has a market share of 4-5 percent, adding that his company plans on turning it into a market leader within a few years.
The entrance of News Corporation into Ukraine would mark the second arrival here of a major media conglomerate. Last September, DirectGroup Bertelsmann, a division of Germany media group Bertelsmann AG, which operates book and music clubs in 22 countries, acquired the Kharkiv-based Family Leisure Club (FLC) book distribution club for an undisclosed amount.
On June 21, news reports indicated that Handelsblatt, a German newspaper publisher belonging to German publishing group Holtzbrinck, is planning to found a new publishing company for financial media in Ukraine, together with Ukrainian publishing group Invest Gazeta. The new company will be called Ekonomika.
