‘I am not going to be an oligarch’

Why Ukraine’s richest man, Rinat Akhmetov, is saying goodbye to his media empire

Last week, Ukraine’s richest man, Rinat Akhmetov, abruptly announced that he was getting out of the media business. In a statement, Akhmetov said that his media holding would transfer all of its licenses to the state and shutter its digital publications. The decision, he added, was driven by the new “anti-oligarch law” entering into force. “I have never been and am not going to be an oligarch,” he said. By relinquishing control over his media assets, Akhmetov no longer meets the legal definition of an oligarch set out in the law — allowing him to dodge the restrictions that come with it. Does Akhmetov’s departure from the media market mean the sun is setting on the era of oligarch-controlled media in Ukraine? Or does Akhmetov have an ulterior motive for giving up his media licenses? Journalist Konstantin Skorkin explains.

How Rinat Akhmetov built his media empire

Rinat Akhmetov, who hails from Donetsk, began building his media empire in the late 1990s, when his structures bought out three regional television stations. These were amalgamated to create the channel TRC Ukraine in 2001. Within a couple years, TRC Ukraine was broadcasting nationwide.

Akhmetov didn’t hide the fact that the TV channel was not so much a business venture as an instrument of political influence — primarily for lobbying the interests of the so-called Donetsk clan. In 2004, for example, TRC Ukraine actively campaigned for presidential candidate Viktor Yanukovych. Following an election marred by reports of widespread electoral fraud, Yanukovych was declared the winner in a run-off vote. The results sparked a peaceful protest movement that would become known as the Orange Revolution. And it was during the revolution that TRC Ukraine’s political leanings became especially apparent. While other television channels gradually began siding with the protesters, TRC Ukraine turned into a pro-Yanukovych stronghold.

Another important tool in Akhmetov’s media arsenal was Segodnya, a daily newspaper founded in 1997. Published nationwide, it became one of the most popular Russian-language tabloids in Ukraine. Under the leadership of well-known media manager Igor Guzhva, who served as Segodnya’s editor-in-chief from 2003–2013, it occupied a leading position in the market. (The newspaper made the switch from print to digital in September 2019.)

In 2008, Akhmetov established Media Group Ukraine, a holding company 100 percent owned by his investment firm System Capital Management (SMC). Headquartered in Kyiv, its subsidiaries came to include not only TRC Ukraine and Segodnya, but also the sports channel Futbol, the entertainment channels Indigo TV and NLO TV, and regional channels based in Donetsk (Donbass and Sigma) and Dnipro (Channel 34). In 2015, Akhmetov’s media holding became the publisher of Vogue Ukraine. And in 2019, it launched its own news channel, Ukraine 24. By 2022, Media Group Ukraine owned 11 TV channels in total.

Notably, other Ukrainian oligarchs consolidated their media assets around the same time: Victor Pinchuk founded the Starlight Media holding, Ihor Kolomoisky took control of 1+1 Media Group, and Dmytro Firtash acquired Inter Media Group. Owning television channels offered them an array of benefits, including the chance to influence public opinion, spotlight loyal politicians, and drown out rivals.

Accordingly, Akhmetov’s media holding continued to support Viktor Yanukovych and his pro-Russian Party of Regions up until 2014. But during the Revolution of Dignity (also known as the Euromaidan) the oligarch took a “wait-and-see” approach. As a result, his media outlets didn’t present a unified position, leading to conflicts with Yanukovych’s entourage. (Viktor Yanukovych was eventually ousted during the revolution and fled to Russia.)

Generally speaking, Akhmetov’s TV channels tried to occupy a national niche with an emphasis on reaching Russian-speaking audiences in the country’s southeast. After the 2014 revolution, however, the channel introduced more Ukrainian-language programming (whereas in 2014, 90 percent of TRC Ukraine’s airtime was dedicated to Russian-language programming, by 2017 this share had dropped to 74 percent). The channel also continued to actively promote political initiatives supported or financed by Akhmetov, such as the pro-Russian party Opposition Bloc (which succeeded the Party of Regions) and the Radical Party of Oleh Liashko.

In 2021, Akhmetov found himself embroiled in conflict with Ukrainian President Volodymyr Zelensky, and mobilized his media structures accordingly. Zelensky’s government had been working to restrict the political and economic influence of oligarchic groups in Ukraine — and Akhmetov wasn’t happy about it. As such, he turned his media holding into a rallying point for all of those who had grown dissatisfied with Zelensky’s government and political talk shows on his networks began actively giving the floor to all sorts of opposition figures.

Political analysts predicted that during the next election cycle, Zelensky would be up against a broad opposition coalition involving a number of political heavyweights, such as ex-Interior Minister Arsen Avakov and former Parliamentary Chairman Dmytro Razumkov. Akhmetov’s holding was supposed to provide media support to this “anti-Zelensky” front. Then, Russia’s February invasion of Ukraine changed the country’s political and media landscape completely.

The ‘United News’ monopoly

After Russia began its full-scale invasion of Ukraine on February 24, Ukrainian TV channels put themselves on a war footing. The next day, the country’s main public and private channels began broadcasting a round-the-clock telemarathon under the hashtag #UArazom (“UA together”). Akhmetov’s media holding also joined the initiative.

President Zelensky formalized the arrangement on March 20, when he signed a decree on a wartime “unified information policy” that consolidated all national television channels under the “United News #UArazom” platform — a 24 hour broadcast devoid of any entertainment programming. This effectively established a monopoly, under which Akhmetov’s television channels worked for — and hence had their coverage dictated by — the state. This measure, though quite understandable in the context of martial law, was hardly to the liking of private owners.

Having lost influence over his TV channels’ coverage, Akhmetov publicly announced that he was relinquishing his media assets. “I made an involuntary decision that my investment company SCM will exit its media business. This week, Media Group Ukraine will surrender for the benefit of the State all Ukrainian licenses of our television channels for terrestrial and satellite broadcasting, as well as print media licenses,” Akhmetov said in an official statement on July 11.

Akhmetov giving up his broadcasting licenses is tantamount to shutting down his television channels: by law, their frequencies should be tendered in a competition. However, by returning the licenses to the state, the oligarch’s media holding retains all of the brands and copyrights to its content, as well as the physical infrastructure belonging to its TV channels. At this writing, Media Group Ukraine channels were broadcasting the United News telemarathon, and Segodnya’s website was no longer being updated.

The end of an era

Speaking on behalf of the President’s Office, advisor Mykhailo Podolyak welcomed Akhmetov’s decision — but the authorities didn’t really believe the oligarch had pure intentions. Justice Minister Denys Maliuska warned that by surrendering its media licenses, Akhmetov’s holding had created grounds for a potential lawsuit and may one day seek the return of its assets (or monetary damages) by arguing that “either the [Ukrainian] authorities or the Russians put them in a difficult position, where a valuable asset had to be given away for free.”

Maliuska also pointed out that following SMC’s departure from the media market and his business partner Vadym Novinskyi giving up his parliamentary mandate, Akhmetov no longer fits the legal definition of an oligarch spelled out in the “anti-oligarch law.” That said, some Ukrainian media experts believe that citing pressure from the new legislation was a convenient pretext for Akhmetov’s decision.

In fact, the oligarch’s media assets were a loss-making enterprise. According to Forbes.ua, Media Group Ukraine’s 2021 revenue amounted to 467 million hryvnias (equivalent to $15.8 million today), but its consolidated losses totaled 936 million hryvnias ($31.7 million). And given the enormous losses SMC is incurring because of the war, the media business suddenly seems far too costly. Akhmetov’s metallurgical plants in Mariupol (the Azovstal steel plant and the Ilyich Iron & Steel Works) have been completely destroyed, and his energy company DTEK has also suffered extensive damage. According to Akhmetov himself, the pre-war capitalization of his now destroyed and damaged industrial assets exceeded $20 billion. And the wartime market collapse also cost Akhmetov’s television channels 98 percent of their advertising revenue.

Other theories suggest that Akhmetov had no other option but to transfer his TV channels to the state, since it would be impossible to sell them at market price in wartime. Or that he no longer saw the sense in owning his own media outlets, given the curtailment of political life during the war.

With the era of oligarch-controlled television seemingly coming to an end, Ukraine’s media market is headed towards a serious reboot. There’s always the possibility that other oligarchs will follow Akhmetov’s lead and start dumping their media assets. However, this would also have its costs: on the one hand, oligarchs manipulated public opinion to their own ends, but on the other hand, competing business groups long served as a guarantee against the usurpation of the media space and the triumph of a single point of view.

Zelensky’s team had long struggled with a lack of media resources — even on the eve of the full-scale war, they were making efforts to form a pro-presidential press pool on the basis of the state-owned television channels Dom and Rada. Russia’s invasion in February solved this issue: guided by information security concerns, the president managed to take control of all of Ukraine’s key TV channels. Now, there’s a chance that he may be tempted to preserve this setup after the war ends. If this is indeed the case, freedom of speech in Ukraine will face a serious challenge.

Essay by Konstantin Skorkin

Abridged translation by Eilish Hart