As "insider" deals goes, it has to count as one of the most profitable in TV history.
When Russia's fourth most popular network CTC recently paid $395 million to Sweden's Modern Times Group for obscure Moscow-based channel DTV -- which had just a 1.9% share of the market last year -- it was not just the eye-popping figure that struck observers but also the incestuous nature of the deal.
MTG is the biggest single shareholder in entertainment network CTC, with just under 40% of the Nasdaq-listed company's stock. Nothing wrong with that -- inter- and intra-company deals have long been a feature of successful industries, not just television.
But there was another element that caught the attention of old Russian hands: MTG bought DTV just seven years ago, acquiring a 75% stake in 2001 that it upped to 100% in 2004 for a total of $9 million.
Last year DTV turned over $40 million and made around $4 million profit.
Last week's sale, which CTC paid for out of cash reserves (for a station it plans to relaunch as a male-oriented channel to complement its Domashny femme-skewed channel) gave MTG a whopping return on its investment.
But hey, that's nothing unusual in Russia where the economy has grown at rates of 6%-8% for the past eight years and the TV advertising market -- worth $4.3 billion last year -- is forecast to grow by 28% this year.
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