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‘Putin’s chef’ wanted to buy St. Petersburg’s leading investigative news outlet, but the owner of ‘Maxim’ magazine beat him to it

Source: Meduza

Viktor Shkulev now owns the St. Petersburg news publication Fontanka. He also owns the magazines Maxim and Elle.

On Friday, January 11, media magnate Viktor Shkulev chaired the morning planning meeting at Fontanka’s newsroom in St. Petersburg, introducing himself as the outlet’s new owner. A source on Fontanka’s editorial staff told Meduza that Shkulev brought a new logo and a new subheader for the website, changing “Petersburg Internet Newspaper” to “St. Petersburg Online.” According to Meduza’s source, Shkulev said Fontanka would “need to remain equidistant from all political forces,” while making an extra effort to attract male readers (“the beast with the prized fur”) beloved by advertisers.

Viktor Shkulev is the president of the Hearst Shkulev Publishing company, which publishes the Russian-language edition of Maxim, the country’s most popular men’s magazine, as well as the women’s publications Elle, Marie Claire, and Psychologies. The total audience for the company’s publications was 18.2 million people in 2016. Shkulev, however, isn’t just in the magazine business: since 2012, he’s been developing a series of city websites and has bought shares of regional media companies. In the past few years, he’s acquired online-publications in Yekaterinburg, Nizhny Novgorod, Samara, Perm, Novosibirsk, Sochi, and Novokuznetsk, amassing an empire that reaches 19 million people.

Technically speaking, Fontanka is a regional publication, but it has many readers outside St. Petersburg. The website’s monthly audience of 3.5 million readers ranks it 52nd among Russian news websites (above another Shkulev-owned site, E1.ru, which is now called Yekaterinburg Online). According to citation ratings by “Medialogia,” however, Fontanka is much higher, in seventh place — higher than any other regional website. Additionally, Fontanka actually turns a profit: since 2013, the revenues of its legal owner, the “Azhur Media” company, have steadily grown, reaching 164 million rubles ($2.5 million) in 2017. Throughout this period, net profits never fell below 12 million rubles ($180,000), according to the “SPARK-Interfax” database.

Shkulev’s acquisition of a controlling stake in Fontanka was first reported on January 10, 2019, after six months of discussions about the possibility that the outlet would be sold.

Fontanka published investigations about the catering and mercenary mogul Evgeny Prigozhin, causing certain problems for the website

Fontanka is nationally famous in Russia thanks largely to its investigative journalism. Beginning in 2013, the website was one of the first media outlets to report on Evgeny Prigozhin, the St. Petersburg restaurateur who quickly became known as “Putin’s chef,” because his companies regularly prepare food for high-ranking Russian officials, and because Prigozhin has personally catered several Kremlin banquets.

Today, Prigozhin is widely considered one of the most infamous and shadowy Kremlin-connected businessmen in Russia. Journalists have unearthed evidence linking him not only to multiple multi-billion-ruble catering government contracts, but also to the “troll factory” that U.S. officials say tried to interfere in the 2016 presidential election and to the “Wagner” private military company. Fontanka reported on these ties, provoking a backlash that began in 2017.

In August that year, Fontanka published a story by correspondent Denis Korotkov about Russian mercenaries fighting in Syria on Wagner PMC contracts. The report included evidence documenting the group’s battlefield losses, revealing the names of those killed and even partially blurred photographs of their passports. “We made a quantum leap forward [in the story],” Korotkov later told Meduza. “Up until then, people had written pieces about Wagner using incomplete data, but we received serious evidence that the group existed — [documents about] how many people were there and how [Wagner] was financed.”

After that, according to Korotkov, “the pressure was on.” In the fall of 2017, various media outlets started running stories claiming that Fontanka had connections to foreign investors, and that its editors and co-owners operated criminal financial schemes, and even that a deputy editor had transformed the website into a publication “for gays.” Korotkov himself faced threats of physical violence.

“We found out that the dog had grown up pretty quickly,” Korotkov says. “This wasn’t some sort of Gazeta o Gazetakh thing with a couple hundred bloggers trying to find ways of fighting against independent media, but a serious informational structure which could be effective.” Gazeta o Gazetakh is a Prigozhin-connected publication that claimed to have 60,000 readers in St. Petersburg between 2013 and 2014. The newspaper's chief editor, Maria Maiorova, told Meduza that the paper's purpose was to “cleanse the media of untruths and facilitate the unmasking of lies and planted stories.” She refused to say who financed the newspaper, which curiously ran almost zero advertisements. Prigozhin is also believed to be an investor in a far larger online media project called Federal News Agency, which has an estimated monthly audience of 35 million people.

In the fall of 2017, when Fontanka angered oligarch Yuri Kovalchuk and representatives of a presidential envoy, the website’s owners decided to sell

Fontanka was busy making other powerful enemies, as well, upsetting the billionaire Kovalchuk brothers, who also enjoy close ties to Vladimir Putin and access to their own media empires. In late September 2017, Fontanka published two seemingly unrelated articles: the first was about a police run-in involving the screenwriters of the TV series “Private Detective” (who were caught illegally driving a BMW with the Federal Emergency Management Agency’s logo, registered to Mikhail Barakin, one of Yuri Kovalchuk’s neighbors), and the second was about the theft of a safe from the office of President Putin’s envoy to Russia’s Northwestern Federal District.

After these articles were published, Fontanka started having problems with the authorities. A source in the website’s management says Lyubov Sovershaeva, who was at the time working as a deputy for Putin’s envoy in the Northwestern Federal District, has close ties to the Kovalchuks, having worked with them repeatedly over the years at both Rossiya Bank and at different media companies. In particular, she chaired the board of directors of the Kovalchuk-owned holding company “National Media Group” from 2008 to 2011, which administers major networks like Channel Five and REN TV.

Sources told Meduza that reports started circulating after Fontanka’s September stories that the website was helping then Governor Georgy Poltavchenko fight against the president’s envoy in the region — rumors that were allegedly confirmed by the fact that Andrey Konstantinov (Fontanka’s CEO and founder) also served as a voluntary adviser to the governor. Two sources inside Fontanka’s management told Meduza that President Putin personally voiced his displeasure in a phone call with Poltavchenko about the news outlet’s reporting.

That fall, content attacking Fontanka and its editors and founders appeared on more than 50 Internet forums, 25 blogs, and in 20 mass media outlets (Meduza has a full list of these publications). Fontanka held its ground, however, even as adversaries tried to acquire it.

Prigozhin wanted to buy Fontanka, but he couldn’t reach terms with its owners. The author of the investigation about the Wagner PMC quit.

Until 2013, Fontanka belonged to four managers, including CEO Andrey Konstantinov and chief editor Alexander Gorshkov. In 2013, the Swedish media group Bonnier Group acquired a controlling stake, adding Fontanka to its 175 other companies across Europe and the United States. The website’s managers made an estimated $7.5 million on the deal, remaining minority shareholders.

Fontanka wasn’t Bonnier Group’s first asset in Russia: it already owned Delovoi Peterburg, a business-focused daily newspaper founded by the holding group in 1993. Exactly a year after the acquisition of Fontanka, however, Russia adopted a law limiting foreign ownership of media companies to 20 percent, forcing Bonnier Group to sell its Russian media assets in hurry and at a loss to Fort Group, which manages commercial and trade property. A source told Meduza that the Swedes received in rubles only what they paid in 2013, even though the dollar exchange rate had changed drastically. Since Bonnier Group divested from Fontanka, the outlet has stopped disclosing its owners.

In the fall of 2017, Novaya Gazeta reported that Evgeny Prigozhin intended to acquire both Fontanka and Delovoi Peterburg. After a few months, however, Delovoi Peterburg was sold to Grigory Berezkin, who owns Komsomolskaya Pravda and the RBC holding group (one of the owners of Delovoi Peterburg revealed the details of the deal, and Meduza has also written about Berezkin and his media business). Fontanka, meanwhile, remained with its old owners.

A source familiar with the talks says Evgeny Prigozhin actively tried to buy Fontanka, but he ultimately lost his patience with shareholders’ delayed deliberations. He reportedly offered a final 150 million rubles ($2.3 million) for the website, threatening to withdraw the offer permanently within 24 hours. That was apparently the end of negotiations.

Sources told Meduza that the potential sale of Fontanka and the outlet's past problems with billionaires did in fact have some effect on the outlet’s editorial policies. “The founding fathers believed that heroism here was inappropriate,” one employee says. “Everyone decided to keep their heads down and stop poking the bear.” One source says editors increasingly encouraged journalist Denis Korotkov, who broke the Wagner PMC story, to refocus his efforts on more regional issues, given that Fontanka is a regional news outlet.

Last summer, Korotkov left Fontanka and joined Novaya Gazeta, though he says he harbors no grudge against his former employers and merely seized the opportunity to work at a national publication. “More opportunities and a wider range of subjects — it’s not about censorship, but rather about regional limitations,” he told Meduza. So far, Korotkov’s main reporting at Novaya Gazeta has also been about Prigozhin. His biggest story, started while he was still at Fontanka and ultimately published by Novaya Gazeta in October, describes how a St. Petersburg man named Valery Amelchenko carried out orders from people connected to Prigozhin that allegedly included sometimes fatal attacks on politicians and bloggers the billionaire considered to be his enemies. Not long before this article was released, a severed ram’s head appeared in a basket left outside Novaya Gazeta’s newsroom, just a day after someone delivered a funeral wreath with a note that read, “Denis Korotkov is a traitor to the Motherland.”

Last July, three Russian journalists — Orkhan Dzhemal, Alexander Rastorguyev, and Kirill Radchenko — were murdered in the Central African Republic while trying to document activity in the region by mercenaries allegedly connected to Prigozhin. Not long after the killings, the reportedly Prigozhin-connected Federal News Agency announced that it was organizing a trip to CAR to investigate the film crew’s deaths. The media later learned that it was a Federal News Agency correspondent (a man named Kirill Romanovsky) who provided the three journalists with the contact information for their local fixer, “Martin,” whom no one has managed to contact since they were murdered. Four people joined Federal News Agency’s expedition, including Fontanka correspondent Yulia Nikitina.

A source at Fontanka told Meduza that the trip by Nikitina and her colleagues was a purely personal initiative. “There was a serious conversation in the newsroom. At first, everyone was totally against it, but Yulia said she would take unpaid vacation and go no matter what, and nobody was going to hold her back. Then [chief editor] Gorshkov gave her his support.”

Viktor Shkulev has given assurances that he doesn’t intend to change anything, and Fontanka’s chief editor says he’s happy with the new owner

The negotiations between Viktor Shkulev and Fontanka’s owners lasted roughly six months. A source with knowledge of the deal told Meduza that Fort Group didn’t lose any of its initial investment in the website, apparently getting almost twice as much money as Prigozhin offered.

Asked about Fontanka’s influential enemies, Shkulev told Meduza, “It’s all irrelevant,” and insisted that he bought the website for purely business reasons, to strengthen Hearst Shkulev Publishing’s position in the online regional publication market. He says Fontanka’s owners were the ones who approached him. “There won’t be any changes in to Fontanka’s editorial policies,” Shkulev promises.

Chief editor Alexander Gorshkov says the sale is a change for the better. “Fontanka has a lot of unrealized potential. I see people who could be our audience, who haven’t started reading us yet, even within the St. Petersburg area,” he argues, expressing certainty that there will be “no infringements” on the website’s editorial freedom. The new situation also allows Gorshkov to focus solely on his duties as chief editor, relinquishing his role as Fontanka’s publisher to newcomer Dmitry Vitkovsky, brought on board by Shkulev.

Fontanka’s founders retain a minority stake in the business, and they promise there will be no personnel changes in the near future. According to one person present at the meeting between Shkulev and the editorial staff, the website’s new owner vowed to “update” Fontanka’s platform and outlined a few conceptual priorities, including more local reporting, more entertainment content, and more content that will appeal to women.