Prof-Media buys MTV, VH1 Russia for $360 mil
EmptyLONDON -- Leading Russian media holding company Prof-Media has paid $360 million in cash to acquire MTV Networks' local business MTV Russia, the companies announced Monday.
The deal -- in which MTV Networks International takes $190 million and its local Russian partner and a minority investor the rest -- gives Prof-Media, the media wing of billionaire businessman Vladimir Potanin's Interros, 100% control of Wayfarer Media Ltd., the holding company of MTV Russia and VH1 Russia.
Prof-Media is expected to work to develop and expand MTV Russia's current market position in the territory, where it broadcasts to 35 million TV households via a network of 21 owned-and-operated stations and about 650 affiliates as well as cable and satellite operators. VH1 is available to 14 million households, mainly through cable operators.
Prof-Media already runs Moscow-based channels 2X2 and TV3 -- both acquired in the past 18 months -- and was understood to be seeking further strategic investments.
MTV, which launched MTV Russia under license to local partners in 1998, will continue to benefit from a rolling multiyear license with the new owners, which is not affected by the sale.
Prof-Media's CEO Rafael Akopov said television advertising in Russia now represents half of the overall ad market.
"Prof-Media is again strengthening its position in free-to-air entertainment broadcasting," Akopov said. "The MTV Russia acquisition is complementary to our existing operations and exposes us to a new segment of the young and proactive audience, which is heavily in demand from top advertisers. We are optimistic about MTV Russia's future audience and market share growth."
Added MTV Networks chairman CEO Judy McGrath: "MTV Networks has a long-term commitment to building our brands in the Russian market. We look forward to continuing to advance the creative and business success of MTV Russia through our new partnership with Prof-Media."
Bill Roedy, London-based vice chairman of MTV Networks, said the decision to monetize its investment in Russia made sense at a time when the Russian market was strong.
"We are very optimistic about the market in Russia. I have been going to Russia for 20 years and have seen a remarkable transition in that time. Prof-Media represents a good transition for us because they are a very big player in Russia and with a strategic player like that it will really help the business grow. The deal represents a great return for us."