CTC Media transforming Story First Production into production center
MOSCOW. Dec 23 (Interfax) - CTC Media, a leading independent Russian media company, announced the creation of a new creative production center, built on the foundation of the company's Story First Production unit, which is part of the media holding, the company said in a statement.
The new center will bring together all CTC Media production, the company said.
In connection with this planned restructuring, the company has said that the carrying value of the goodwill associated with the company's in-house production unit exceeded its fair value in the fourth quarter. The carrying value of this goodwill as of September 30, 2013 was approximately $30 million, the company said.
This carrying value will be reflected in net profit, CTC Media told Interfax.
CTC Media has not said who will head the new center. Natalia Bilan has been Story First Production's CEO since October of last year, and was the head of the television channel Domashny before that. Bilan will remain in the holding and will continue working on production project, CTC Media said.
The reconstruction is intended to simplify the corporate structure of production, to centralize and optimize business processes, as well as "to bring the creative potential and expertise of our employees together with the concrete goals that stand before the channel," the company said in the statement.
"We are planning to continue focusing on enhancing and developing in-house creative expertise rather than growing production capacities as we believe this strategy is more attractive for the company in the long run," the message quoted CTC Media head Yuliana Slashcheva as saying.
"This will enable us to retain maximum rights to our high-quality original programming, which in turn will allow us to monetize this content across all available platforms," she said.
In November, Slashcheva, who has been the head of CTC Media since August, announced the company's updated strategy. This strategy said that CTC Media was planning to double the production of its own content in three to five years. Additionally, by 2018, CTC Media wants to bring its flagship channel to first place in the 10-45 category, Slashcheva said.
CTC Media created Story First Production in 2011 when Anton Kudryashov was the head of the media holding. Kostafilm and Soho Media, which belong to CTC Media, were part of the production company.
CTC Media's revenue has fallen in the last several years. In January-September of 2013, revenue from its own products, as well as from sublicensing, fell by 23.4% to $12 million, and in the third quarter it fell by 11.2% to $2.97 million.
CTC Media owns Russian TV channels CTC, Domashny and Peretz, as well as media assets in Kazakhstan and Moldova, and a production company.
CTC's largest shareholder is Sweden's Modern Times Group with 37.9%, Cyprus-based Telcrest Investments Ltd., which is owned by Kovalchuk's National Media Group, Bank Rossiya and Surgutneftegas , hold a blocking stake. The free float is about 37%.
