The Kremlin strengthened its grip on the media analysts said on Friday as a Russian steel baron and top European broadcaster RTL took over one of Russia's last private television stations. Russia's electricity monopoly Unified Energy System (UES) said Friday it agreed to sell 70 percent of REN TV for $100 million to steel and automotive group Severstal, which is controlled by steel baron Alexei Mordashov.
RTL, a unit of German media giant Bertelsmann, said it bought the 30 percent stake of REN TV founders Irina Lesnevskaya and her son Dmitry Lesnevsky for an undisclosed sum.
REN TV has been the last large station openly critical of President Vladimir Putin and analysts said the change of ownership could make coverage more compliant ahead of the 2008 presidential elections.
Mordashov, with wealth put at $5.1 billion by Forbes magazine, is seen as a businessman loyal to the government.
UES, which owns the channel, is headed by Anatoly Chubais, the controversial former head of the presidential administration who has dared to criticise Kremlin policies.
"Severstal is a proxy for the Kremlin," said an analyst who follows the Russian media sector and asked not to be named. "The logic of control is that you have to keep on going further and further. By 2008 they want to have control of everything of any potential significance.
"The Kremlin team doesn't want to take any chances - why leave a television station in the hands of someone who's potentially a political rival?"
Moscow-based REN TV reaches 97 million people and has more than 180 broadcasting agreements with local operators.
Speaking before news of the Severstal deal, RTL spokesman Andrew Buckhurst said the editorial line at REN TV would remain unchanged after RTL's entry.
"It will be a general-interest channel like all RTL channels, with proper news reporting as well as entertainment. We want to invest in this channel and grow it to become Russia's most successful commercial TV channel," he said.
But for others, the deal was yet another nail in the coffin of the free media in Russia.
"For RTL, this is business. But for Russia, it is very sad," Raf Shakirov, former editor-in-chief of respected daily Izvestia, told Reuters.
He was dismissed after his coverage of September's bloody school siege in Beslan in southern Russia upset the Kremlin.
"The rumour is that REN TV will become an entertainment channel. If that happens, Russia will lose its last remaining independent television channel," he said.
All other major networks are owned or indirectly controlled by the state and air favourable reports about Kremlin policies.
The influential NTV television network, once fiercely critical of the Kremlin and a bastion of the non-state-controlled media, was eventually wrested by the state from its owner, media tycoon Vladimir Gusinsky.
Two radio stations and a few newspapers still remain independent, but analysts say their days may be numbered, with the state expanding its hold over the media prior to the December 2007 parliamentary and 2008 presidential elections.
"The Kremlin wants to cleanse the Russian media of political content. It wants to have total control," Shakirov said. "They are doing this by using business partners. Their only demand is not to confront or conflict official news."
"In the end, the opposition will not have any independent media voice left," he said.
State natural gas giant Gazprom recently acquired a controlling stake in Izvestia, one of the few remaining independent newspapers. Its media arm already owns Moscow's independent radio station Ekho Moskvy and NTV.
"The current trend in the Russian media is that new buyers are always more loyal to the Kremlin than the previous ones," said Georgy Bovt, editor-in-chief of business magazine Profil.
"I believe REN TV editorial policy will change accordingly."
Russia would be the 11th country in which RTL, which can hold up to 49 percent of REN TV under Russian media ownership rules, owns a TV station. RTL is Bertelsmann's most profitable unit and its main hope for growth and has a 2-billion-euro ($2.41 billion) war chest to spend on eastern and southern European stations.
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