Modern Times Group’s retreat from Central and Eastern Europe has been little short of spectacular.
If we cast our minds back to just three years ago, the company looked totally committed to the region. So much so, in fact, that it was putting up a strong fight to retain its 50% stake in the now defunct Russian DTH platform Raduga TV. Accused by the regulator Roskomnadzor of operating the service without a licence, it applied for universal channel licences and at the same time vehemently denied it planned to sell its stake in the platform.
However, its efforts proved to be in vain and Raduga TV eventually stopped broadcasting in December 2014. Shortly afterwards, the platform’s operator DalGeoKom, jointly owned by MTG and Continental Media, was declared bankrupt.
MTG’s decision to essentially give up Raduga TV was undoubtedly influenced by what was then still upcoming legislation that placed a foreign ownership limit of 20% on media companies.
In anticipation of the legislation, it put up an even stronger fight to reach an accommodation with the Russian authorities over its 38% stake in CTC Media, one of the country’s leading commercial broadcasters. Again, its efforts proved to be in vain and it eventually received $123 million in cash for the stake, with part of the proceeds allocated to further develop MTG’s digital video entertainment business.
Also in Russia, and again due to the 20% ownership limit, MTG sold its local pay-TV business to a company named LLC Sinerdzhi.
Elsewhere, MTG sold its DTH platform Viasat Ukraine to 1+1 Media for a fee believed to be in the region of $15-20 million. It also sold its Hungarian free TV operations to Sony Pictures Television (SPT) for an undisclosed amount.
Now, we have learned that MTG has disposed of its 50% stake in FTV Prima, one of the top two commercial broadcasters in the Czech Republic. It was certainly under no regulatory pressure to do so, as had been the case with its assets in Russia, and has indicated that it may use the proceeds to increase its investment in the online games developer InnoGames, which it initially bought into late last year.
While MTG still retains a presence in the Baltics and Bulgaria, through both free and subscription TV services, its role in the region as a whole has greatly diminished.