Ukraine’s leading Internet news site and a Polish media giant mull partnership on the country’s promising media market
Ukraine’s leading Internet news site and a Polish media giant are mulling a partnership on the country’s promising media market, according to reports and sources.
Media reports have speculated that the Warsaw-based Agora Group is looking to buy the Ukrayinska Pravda website, but both sides have neither confirmed nor denied the reports. Informed sources say that the subject of the deal may in fact be a new Internet or printed media project.
Reports of the alleged talks first surfaced on the Kyiv-based media watchdog Telekritika’s website, citing an anonymous source within the Polish embassy.
Pravda was founded by muckraking journalist Heorhiy Gongadze who was murdered in 2000. The site’s domain is registered to Olena Prytula, its chief editor and a close friend of the late Gongadze. She declined comment on the reports.
Agora operates more than 30 online media projects, including the Internet version of its flagship newspaper Gazeta Wyborcza – Poland’s first independent newspaper that was founded under Communist Party rule in 1989. Publicly-traded on exchanges in Warsaw and London, the company posted revenues of $375.6 million in the first nine months of the year and reported profits of $29.8 million.
Subsidiary Agora Ukraine Ltd was registered in Kyiv in May of this year with a share capital of $9,000 that is 100 percent owned by the parent company. The subsidiary is not operating any projects in Ukraine at the moment, said Agora Ukraine general director Janusz Janiec.
“In Ukraine we are primarily interested in the publishing and online business, which was the reason to launch Agora Ukraine. At present, we are just studying the Ukrainian market, marking out the most attractive projects for us, though we are not ready yet to speak about any definite plans,” said Agora’s spokesperson Urszula Strych.
Polish analysts said that the acquisition of Pravda by Agora in the near future would be timely.
“It is a good time to enter Ukrainian media market to beat out competitors, especially German media groups. Ukraine’s market is currently at the stage Poland was it in the 90s, and [Agora’s] experience with Gazeta Wyborcza proved that it can perform successfully in such conditions,” reported the Polish newspaper Puls Biznesu.
Ukrainian experts, meanwhile, said that an eventual deal would be advantageous for both sides and valued it between $5-10 million.
Pravda will be a tasty morsel for Polish investors, according to Natalia Ligacheva, the chief editor of Telekritika magazine. She said that Ukraine’s rapidly growing media market is attracting foreign investors with its great potential for expansion.
“The factors that mostly restrained foreign investors from entering Ukraine’s market to the present day were political instability and the absence of an adequate system of media distribution,” she said.
While TV and other media can be too expensive to purchase for the Poles, the rapidly developing Internet media segment is a promising area that does not require large scale investments, according to Ligacheva.
“For Ukrayinska Pravda the deal can also prove to be advantageous in every respect – none of the local media business investors are specialized in this media, while foreign investors are much more experienced in this area. Additional investments will speed up business expansion and introduce Western standards to the way media business is conducted,” Ligacheva said.
“Pravda’s business development strategy has been very smart,” said Yevhen Hlibovytsky, CEO of the Kyiv-based ProMova communications consulting company. “In addition, the news site, the business portal Ekonomichna Pravda and the sports site Champion.com.ua were successfully spun off.”
Ukraine’s Internet registrar lists Prytula as the owner of the business and sports sites, as well as the popular paparazzi Tabloid.com.ua site.
Informed sources have said that the subject of the talks may not necessarily be the purchase of any of Pravda’s existing sites, but a completely new media project.
The Kommersant-Ukrayina newspaper reported on Dec. 4 that Agora was considering a “new socio-political popular publication” that the Polish Pekao SA bank estimated to be worth $10 million.
