Why Ukraine's richest man is winding down his massive media business

Last week, Ukraine’s richest man Rinat Akhmetov announced he would be winding down his media business, including the most popular TV channel in the country, multiple sports and regional TV channels, and a popular newspaper.

Why is Akhmetov giving up his media empire built over more than two decades – and what’s next for his media assets?

Rinat Akhmetov’s media empire

Rinat Akhmetov has long been the richest person in Ukraine; in February 2022, Forbes Ukraine estimated his wealth at $13.7 billion. Most of his wealth comes from metallurgy, coal mining and energy, but Akhmetov’s business spans various spheres, including real estate and media. 

Akhmetov is also a former member of the parliament, and a media tycoon – in Ukraine, big business had long been intertwined with politics and media. He was a political ally of Ukraine’s president Viktor Yanukovych ousted by the revolution in 2014. At the peak of his wealth and political influence almost a decade ago, Akhmetov’s wealth was estimated at over $22 billion.

Akhmetov began building his media empire in the late 1990s, and over the next two decades he ended up controlling Ukraine’s most popular TV channel Ukraina, as well as various sports and regional TV channels, nationwide newspaper Segodnya, streaming service Oll.tv, and media production company TelePro, among other assets.

Before Russia’s full-scale invasion of Ukraine, Forbes Ukraine estimated Media Group Ukraine – the company that controls Akhmetov’s media assets – to be worth $200 million (€200 million).

Why Akhmetov is winding down his media business 

On Monday, July 11th, Akhmetov announced his company SCM would be exiting its media business. TV and print media licences would be surrendered to the government, and online media would cease publication. (Despite early speculations, the assets themselves are not transferred to the government; the media group retains its intellectual property and physical assets).

The media group, which includes some 4,000 reporters and other employees, has started laying people off. Akhmetov’s decision reportedly came as a surprise to the Ukrainian media community, as well as to the government and even to some of the group’s senior managers.

According to Akhmetov’s statement, the decision was made so the businessman is not labelled as an oligarch per Ukraine’s recent law, which was passed in 2021 and recently came into effect. Considerable influence over media is one of the criteria that constitute an oligarch.

“A short six-month term provided for by the Law for the sale of media assets, coupled with the Russian military aggression against Ukraine make it impossible for SCM to sell its media business on market terms”, the statement says. 

In reality, while it’s an important reason behind Akhmetov’s decision, it’s likely not the only one.

Akhmetov’s media business has never been a profit generator – the tycoon used it for political influence much more than for financial gain. However, during the 2022 war, it became particularly costly. Advertising was virtually nonexistent in the war’s first months and is crawling back slowly. During martial law, nationwide TV channels are legally required to broadcast a single joint marathon. 

At the same time, Akhmetov became poorer in 2022, particularly as he lost many of his key business assets in eastern Ukraine because of the war – either as destroyed or as occupied by Russia. Azovstal, the steel works in Mariupol that became a symbol of the Ukrainian’s military resistance before being taken by Russian invaders, belongs to Akhmetov’s company Metinvest. Overall, according to Forbes Ukraine’s estimation, Akhmetov’s wealth has decreased by three times since the war started. 

What’s more, the media is much less relevant as a tool for political influence during the full-scale war – there’s little politics in Ukraine today, with the population united around the government and the authorities exercising strict control over the media landscape as part of martial law.

That is why, according to a media manager quoted by Forbes Ukraine, Akmetov’s decision is a “classy exit from a loss-making asset.”

What’s next for Media Group Ukraine

Some media experts in Ukraine don’t believe that Akhmetov will just give up his media business – and are waiting for his next move.

The day after Akhmetov’s decision was announced, Halyna Petrenko, Ukrainian media expert and director of NGO “Detector Media”, wrote that it’s hard to believe that Akhmetov is exiting media business because he doesn’t want to spend money on it – despite his losses, he remains Ukraine’s richest person.

Petrenko highlights Media Group Ukraine’s plans to broadcast abroad – recently, the company launched a package of nine channels on Polish digital platform Polsat; before, it had announced plans to launch in other countries. 

Indeed, Akhmetov’s media business is not totally dead. The media group can continue broadcasting from outside Ukraine and reach Ukrainian audiences this way; this activity doesn’t require a licence from the Ukrainian government. However, Forbes Ukraine points out that the influence of Akhmetov’s “European” channels would be much smaller, it won’t be able to reach the numbers the Ukraina channel used to enjoy. 

There are still a lot of unknowns as to the future of Akhmetov’s media empire – we’ll know more in the coming weeks. Still, it’s clear now that Akhmetov has lost its once-firm grip on the Ukrainian media landscape.

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