Gorky Studio's future may not be in film

Some fear purchase by developer for land

MOSCOW -- There will likely be no shortage of potential buyers for Russia's oldest film complex, Gorky Studio, which the government recently put on the block and wants to be sold by the end of this year.

However, potential buyers may not necessarily come from the film industry, and the possibility that someone will buy the complex for the land and turn it into something else is not being ruled out.

Gorky Studio, which comprises five studious each with an area of 500-1,000 square meters, was built in the 1930s and is in need of major refurbishment.

While a sale tender is expected to be officially announced soon, local film companies, most of which don't have their own facilities, may not be the first to place bids.

"We are studying the possibility of bidding, but we haven't made a decision yet," Sergei Tikhonov, investment director at Prof-Media, which owns a controlling stake in the country's largest film producer, Central Partnership, told The Hollywood Reporter.

"So far, we've been doing fine using rented facilities," he said. "Actually, studio complexes are not exactly our business. Our business is production and distribution of films."

Industry insiders say that there may be players in the Russian film industry interested in acquiring the complex. "There are domestic film companies that could bid for the complex, why not?" said Yuri Plechev, general director of the Russian Guild of Producers. "The facilities are attractive, even though they cannot be compared to those of Mosfilm, which are in line with those in Western Europe."

"There were domestic film companies among bidders in the previous tender two years ago, which the government eventually canceled," said Valery Rusin, deputy general director of Gorky Studios. "When the government saw the number of bidders go from three to 23, it assumed something was wrong with the starting price and cancelled the tender." Back then the starting price was $5 million.

Meanwhile, the biggest fear of the studio complex management is that it will be bought by a developer for the land -- which is estimated to be worth about $18 million by local realtors -- and turned into a large shopping center or residential complex. "We asked the government to keep a blocking share, but it wouldn't do it," Rusin said.

And as the local film industry consists of primarily smaller players with no substantial cash reserves, the possibility that a company from another field could buy Gorky Studio is not unlikely.

"There aren't that many large film companies here," Tikhonov said. "But there are financial, industrial groups, such as Alfa or Renova, that have interest in the film industry in addition to other areas, and they might buy the complex for both land and facilities."

He added that land could be used for something else, while studio facilities would be transferred elsewhere -- in line with a much discussed idea of a huge studio complex, "a Russian Hollywood," outside Moscow.