Era, a new private company reportedly financed by friends of President Leonid Kuchma, has quickly and quietly taken over blocks of airtime on the state’s first national television and radio channels, and is aiming for more.
On Jan. 11 Era launched its first broadcast on Ukraine’s first state television channel, UT-1. In a contract that was not subject to competitive tender and has not been made public, the state broadcast monopoly Ukrteleradio assigned Era five hours and five minutes of airtime on UT-1 per day, and the right to sell advertising during that time.
Then, earlier this month, in a similarly quiet deal, Era received three time slots on the state’s first national radio station. Most old Soviet radios receive only that station.
At the same time, the company applied for a license to broadcast on the second state television channel, UT-2, during a pre-dawn time slot not used by Studio 1+1, the foreign-backed group of companies that has a license for 12 hours of UT-2 time in the mornings and evenings.
Era was reportedly founded in December, around the time that Ukrainian-Israeli businessman Vadim Rabinovich was reportedly negotiating his departure from 1+1. Central European Media Enterprises, the Bermuda-based TV company led by American businessman Ronald Lauder, announced in early January that it had bought an additional 10 percent equity interest in 1+1, and 1+1 sources said CME had bought out Rabinovich.
Vitaly Lukyanenko, the former chief editor of Era’s TV programs, said in a previously published interview and confirmed to the Post on March 9 that there are three people financing the Era company: Ukrainian-Israeli businessman Vadim Rabinovich; former Foreign Trade Minister Serhy Osyka; and Andry Derkach, a non-staff adviser to the prime minister, member of parliament and son of State Security Service (SBU) director Leonid Derkach.
Rabinovich, Osyka and Andry Derkach are all friends and allies of President Leonid Kuchma and are thought to be working actively for his re-election.
Lukyanenko left Era soon after giving those interviews, and the director of Era’s TV operations, Sergei Andryushchenko, said Lukyanenko’s account of Era’s financial backing was untrue. However, he refused to name Era’s founders or financiers or anyone with higher authority at Era than himself, saying it was ‘the company’s internal business.’
Andryushchenko also disputed reports that Era was founded in December 1998 but refused to disclose the date of the company’s registration.
However, the newspaper Stolichniye Novosti, which is controlled by Rabinovich, also named Derkach, Osyka and Rabinovich as the main figures behind Era in a January article.
Although the handing-out of national airtime at the beginning of an election year has obvious political implications, the deal so far seems to be primarily commercial. There is little that could be done to make state radio and television more pro-Kuchma, although it could be made much slicker.
Along with airtime, Era was been given the right to sell advertising during its time slots. Era has its own advertising agency, Rasborn TV, which sells ads for around $200 per 30-second slot. The company Gravis, run by Kuchma’s close friend and political ally Oleksandr Volkov, has a similar deal to produce programs and sell ads on UT-1.
Ukrteleradio chief Zinovy Kulyk said the Era contract was necessitated by UT-1’s lack of resources. In an interview with the newspaper Den on March 13, he said the state pays less than a third of what it costs to produce all of UT-1’s programs.
However, both Era and Gravis use the national-television facilities to make their programs, and Gravis is paid by UT for its programs.
Era’s morning program, Dobroho Ranku Ukraino (Good Morning Ukraine), broadcast on UT-1 from 6 to 9 a.m. daily, had earlier been produced by the same people and aired at the same time, but under the UT-1 label.
The staff who used to make the program for UT are now employed by Era. Some told the Post that they did not choose to change employers. They said people were simply transferred to Era because they had produced programs that were aired during time slots given to Era. They also received a pay raise, they said.
At the National Radio, the change happened even more simply.
Era radio received a total of three hours and 25 minutes per day on the first radio channel, before the live broadcast of the parliament session and during parliament’s lunch break.
But Era radio officially employs only four administrative workers. The style of the programs has changed from the old Soviet format to a more popular one, but the programs are still made by Ukrteleradio employees.
Another TV company, Perekhid Media, recently attempted to negotiate a similar deal to the one Era now has, but was turned down. Kulyk said in February that the deal Perekhid sought would be ‘illegal.’
‘We offered licensed programming and payment,’ said Andy Bain, Perekhid’s owner. ‘From what I understand from recent national press, the main companies now operating with state TV provide neither. One can only guess why [Kulyk] would go out of his way to call our option illegal.’
Bain’s company lost a license to broadcast on UT-2 in 1996 and is suing CME in England. During his recent negotiations with Kulyk, he was reportedly offering to drop that suit if given time on UT-1.
Some industry analysts connected Era’s application for time on UT-2 to Rabinovich’s falling out with 1+1.
‘He probably is upset because his ambitions suffered,’ said Ihor Havrylov, a member of the parliament subcommittee on television.
Andryuschenko said he did not know the motives of his company’s backers for applying for time on UT-2. He agreed that the three-hour early-morning time slot that Era applied for would be hard to make profitable.
Oleksandr Rodnyansky, general producer at 1+1, said he could not judge Era’s motives, but said Era would likely later ask for more time on UT-2.
‘After appearing on the channel, the next step is reconsideration of the time slots,’ he said.
Officials from the National Television and Radio Council, the state agency in charge of broadcast licenses, said there had been more than one applicant for the early-morning slot on UT-2.
‘[It’s] a big question for me why they need this time anyway,’ said Mykola Slobodyan, deputy head of the council.
The council itself is in the midst of its own reorganization because the terms of the old council’s members expired in December, and so far only half its members have been replaced.
Parliament on March 16 appointed Mykola Knyazhytsky, Serhy Aksyonenko, Volodymyr Tsendrovsky and Mykola Chervenchuk as its new representatives to the council.
Knyazhytsky, who is president of the private STB channel and served briefly as head of Ukrteleradio last year, was the most interesting of those appointments and is being promoted by deputies in parliament as the next council chairman.
Knyazhytsky’s bid for the top position on the council may be connected to the recent intimidation campaign on STB, which STB alleges has resulted in the killing of one person. The latest incident took place on March 15, when the apartment of the editor of STB’s news programs was burgled and many videotapes, computer disks and paper documents were stolen.
