Complaints Threaten Film Deal

Complaints Threaten Film Deal

Published: October 11, 2011 (Issue # 1678)

One of the largest cinema projects in Russia — a partnership between billionaire Vladimir Yevtushenkov’s Sistema and St. Petersburg’s venerable film studio Lenfilm — could fall apart due to complaints by filmmakers.

The Culture Minister recalled a package of documents on creating a public-private partnership between Lenfilm and Sistema that had already been agreed upon with all relevant government agencies, two officials familiar with the details of the project told Vedomosti. Prime Minister Vladimir Putin’s spokesman Dmitry Peskov confirmed that the documents had been retracted.

The option submitted to the government proposes that the company RWS — part of Sistema Mass Media, which belongs to Sistema — in exchange for its own assets would receive 75 percent of Lenfilm’s shares. The government would keep 25 percent plus one share.

Lenfilm is completely owned by the government, and the studio’s management has regularly complained to officials about insufficient money, dilapidated facilities and even a lack of means to pay workers’ salaries. Yevtushenkov proposed to the government to merge the production capacity of Lenfilm with his own studio RWS.

In August, a package of documents together with a draft edict by President Dmitry Medvedev on the creation of a PPP was submitted to the Culture Ministry, two officials familiar with the project told Vedomosti. At that time, filmmakers Alexei German Sr. and Alexander Sokurov wrote a letter to Putin stating that the planned unification “means the end of Lenfilm as … an independent producer of high-quality national cinematographic productions.”

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