Russian Government Approves Discovery's Joint Venture With National Media Group
The U.S. broadcaster had to make the move to comply with a law on media companies' ownership.
Russia's federal anti-monopoly service has approved the creation of a joint venture between Discovery and the National Media Group (NMG), owned by Kremlin loyalist Yuri Kovalchuk, the agency announced.
To continue operation in Russia after January 1, 2016, Discovery had to make sure that its holdings in a locally registered company don't exceed 20 percent. In the joint venture, Media Alliance, NMG will hold 80 percent, with Discovery holding the remaining 20-percent stake.
Olga Paskina, Discovery’s manager of Northeast Europe, will head the new company.
Earlier this year, Discovery Networks pledged it will comply with the law limiting foreign ownership of media companies.
Meanwhile, the joint venture with NMG will also allow Discovery to resume running commercials on its channels. As of 2015, networks distributed in Russia over satellite and cable are banned from running commercials. Thanks to NMG, Media Alliance will have an air frequency, which will make Discovery's channels exempt from the regulation.
In Russia, 11 Discovery channels are available, including Discovery Channel, which has been on the air in the country since 1998; Animal Planet; TLC; and Eurosport.
NMG controls free-to-air networks Ren-TV and Fifth Channel and a number of smaller media assets.
Kovalchuk was affected by the Western sanctions against Russia introduced last year, but they didn't apply to his media assets.