The financial-industrial groups’ dominance of Ukraine’s main media outlets – and their ability to subsidize their losses – ‘captures’ politicians who rely on media access to develop the profile needed to win votes.
Control of the mainstream media is critically important for the biggest stakeholders in systema because of its political power. The largest FIGs are the dominant players in the media market. Four groups own the 15 most popular nationwide television channels, as well as the most popular newspapers, radio stations, regional TV channels and internet media sources. They are StarLight Media (owned by Viktor Pinchuk), Media Group Ukraine (owned by Rinat Akhmetov), 1+1 Media (owned by Ihor Kolomoisky, Viktor Medvedchuk and Ihor Surkis), Inter Media Group (owned by Dmytro Firtash, Valeriy Khoroshkovskii and Serhiy Lyovochkin). According to one estimate, these groups together reach over 75 per cent of Ukraine’s TV audience. Ownership in the sector has experienced a remarkable degree of stability over the past decade. During this time, the top 10 media owners (by size of audience) have remained almost unchanged. This is a powerful indicator of systema’s durability.
The FIGs’ ownership of the main media outlets and their ability to subsidize their losses – for example, Inter lost $70 million in 2012 – ‘captures’ politicians who rely on media access to develop the profile required to attract voters. This relationship leads to inevitable politicization of media coverage, particularly during election campaigns, and provides a platform to challenge unwelcome reform efforts. Elected politicians also seek to use media to maintain voters’ trust. Political advertising, especially on TV, consumes a large part of campaign budgets because of its perceived effectiveness, and contributes to a distortion of the media market in favour of FIGs’ interests. There are currently no restrictions on campaign spending on advertising. Media owners are also able to use their outlets to protect their businesses from competitors and politicians, particularly during pre-election campaigns when they can shape national news reporting.
In some regional centres, subsidiaries of the major FIGs or local business groups have stakes in local media and exercise influence over coverage in the same way as happens at national level.
Suspilne, the public broadcaster launched in 2015, is starting to make inroads into the audiences of FIG-controlled media as the quality of its programming has improved, but it cannot compete with their offering. There are signs, too, that it is suffering from political interference and underfunding that limit its effectiveness. Similarly, independent media are in no position to match the major channels’ ability to attract advertising for television and digital channels. FIGs also have a strong presence in the digital media sector, where they own three of the top 10 news websites (in terms of audience reach: obozrevatel.com, segodnya.ua and tsn.ua).
Government regulation of the media remains open to political influence. The president and parliament appoint, by equal quotas, the members of the regulator, the National Council of Television and Radio Broadcasting. Similarly, the president nominates the head of the licensing body, the State Committee for Television and Radio Broadcasting, and parliament approves the appointment. The draft media law that has been under discussion in parliament since early 2020, and which had not yet had its first reading at the time of writing this paper, is the work of several individuals in government and parliament connected with media groups controlled by the FIGs. It is hardly surprising that the major media companies have no need to lobby against its provisions.
For now, the FIGs’ dominance of the major media channels remains unchallenged. Over time, a combination of regulatory changes, digital disruption, and the appearance of new channels and new models of media business may erode their influence. For example, increased transparency of ownership and funding of digital media, as envisaged by the draft law, could make it harder to use digital media for political purposes.