Taking effect on January 1 of this year, amendments to the media law restricting foreigner's share to 20% in Russian media outlets had major companies sell their shares and leave the country.
Reportedly, the law was approved by the Federation Council on Oct. 1, 2014 and was signed by President Vladimir Putin on Oct. 14 on the same year. This amedment compels foreign countries, legal entities and individuals including Russian legal entities owning media outlets to be limited to only 20% stake in Russian media. Previously, foreigners could own up to a 50% stake in Russian television and radio, while no restrictions were made for print and online media. Now this 20-percent share limit applies to all forms of media including printed and online editions.
According to IFC Markets analyst, Dmitry Lukashov, as reported by RBTH, foreigners are ready to leave and have been leaving the Russian media not only because of the ownership ban and limitation, but also due to business profitability.
In a report by The Moscow Times, in September 2015, two large foreign media holdings have purportedly sold their Russian assets. The German Axel Springer, which controls Forbes, OK! and GEO magazines, and the Swiss Edipresse, which produces the magazines Mother and Baby, Landscape Design and Atelier have already sold their shares.
As it is, foreign companies are currently the main shareholders or even owners of many Russian media outlets including some of the popular channels like Discovery Channel, TLC, Animal Planet, Xtra, Eurosport, Paramount Comedy, MTV, Sony Turbo, and Sony Sci-Fi. Moreover, 60 percent of companies in the magazine and newspaper business in Russia have significant foreign shareholders, GBTimes reports. This new media law, whose requirements if not met, could result in the liquidation of dozens of media outlets including the aforementioned.
Although the law has already taken effect at the beginning of 2016, media outlets will have until February 1, 2017 to bring their ownership structure according to the new amendment.
