The establishment of a single advertising operator in Russia sparked great interest among market players like Shuvalov, Kotlyarenko and Kerimov… They may have already reached an agreement…
The State Duma passed amendments to the federal law “On Advertising” in the first reading. These changes involve creating a single operator for digital structures and announcements, which will manage all electronic billboards in the country without bidding for 30 years.
Who has plans to dominate the Russian outdoor advertising market, the correspondent understood The Moscow Post.
Case is a shield
They aim to hand over control of all advertising screens and classifiers to one market player. A single operator will exclusively advertise through its software on all eligible structures owned by other market players. Moreover, the leading advertiser has the right to charge users for any services provided through their software, and there is no limit to the amount by law.
There are two divided opinions about the amendments to the law. The first camp includes the authors and supporters who view the initiative as a way to protect billboards and ad services from cyber attacks, indicating the protection of national interests. The second camp consists of market participants who oppose the bill and believe that it will lead to monopolization.
Even the Federal Antimonopoly Service believes that enacting the law for a single operator poses the risk of abuse by one company against other market participants.
There is also a risk of a “non-competitive procedure” in the project, meaning the operator can bypass the bidding process and enter into contracts for up to 30 years. All of this appears to be a barrier to the growth of small and medium-sized businesses.
Gallery Deputy General Director Evgenia Volgina informed the publication Lenta.ruthat the bill raises doubts about the future development of the advertising market. It is evident that an unjustified monopoly is being established, and that too for decades to come.
It is reported that over 60 representatives of advertising industry companies compiled joint letters criticizing the bill and sent them to the Chairman of the Government of the Russian Federation Mikhail Mishustin, Chairman of the State Duma Vyacheslav Volodin, Chairman of the State Duma Committee on Economic Policy Maxim Topilin, Head of the Federal Antimonopoly Service Maxim Shaskolsky, Senator from St. Petersburg Andrey Kutepov.
Out of competition
By the current standards outlined in the draft law for its establishment, only one company meets the criteria for a single operator of outdoor digital advertising – Russ Outdoor. It's intriguing to see how a company registered in the British Virgin Islands is connected to protecting national interests.
A photo: rusprofile.ru
This company is the largest outdoor advertising operator in the country. In 2020, Russ Outdoor possessed 26.7 thousand advertising spaces in 50 Russian cities. It signed 49 government contracts worth 192 million rubles, and the revenue for 2021 totaled 10 billion rubles.
How can you say that the market will be competitive if even now Russ Outdoor receives contracts from its own? In 2020, there was information that 26.4% belonged to VTB, which also acts as the group’s creditor: 9 contracts worth 108 million rubles were concluded with them. Andrey Kostin will not miss its benefits?
A photo: rusprofile.ru
Three from the casket
In February 2022, it became known that Russ Outdoor had a new co-owner. They became the closed-end investment combined fund “Reservaktiv”, which is managed by LLC “KSP Capital Asset Management”. Its key beneficiary is Sergey Kotlyarenko.
The businessman began his career in 1995, then he was a legal assistant in the law office “AML of the Moscow City Bar Association” created by Alexander Mamut, where he met Igor Shuvalov. Recall that the latter is now the chairman of the state corporation VEB.RF.
But that’s not all. In 2007, Shuvalov became a private client of the law firm founded by Kotlyarenko, then a multifamily office was created on the basis of the KSP group of companies, including for the Shuvalov family. Wrote about it Forbes.
Kotlyarenko also had large scandalous assets, behind which, again, Shuvalov could stand. For example, in the market for the collection and disposal of household waste with a volume of tens of billions of dollars a year, I wrote more about this The Moscow Post.
The scandalous senator of the Federation Council from the Republic of Dagestan Suleiman Kerimov may be involved in the story of the “seizure” of the advertising market. He may also be one of the powerful beneficiaries of Russ Outdoor.
The majority co-owner of Russ Outdoor is Stinn LLC. The same company owns CJSC Olimp, the structure of the metropolitan operator Vera-Olimp, as well as the advertising company Laysa. And Grigory Sadoyan is one of the founders of the Stinn company itself, he owns 69.9%, and he has been associated with Suleiman Kerimov more than once.
At one time, firms with huge contracts for outdoor advertising united under the hand of Sadoyan, and apparently Senator Suleiman Kerimov helped them in this.
As a result, it turns out that if the scandalous and not very expedient bill, which is already in doubt, is approved, then most likely the “king” of the feast will be Russ Outdoor. This will lead to the fact that a monopoly is formed, which will “let in” only its own. It is unlikely that large business sharks, millions are spinning around, will let the “small fish” feast on them.
Isn’t this what gentlemen Kotlyarenko, Shuvalov and Kerimov are striving for?
