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Media News

Russia's Media-One to partner with oligarch-source

* Metals magnate in deal talks with Media-One - source

* Media-One venture with Disney was blocked this year

* State wary of foreigners in mass media - analyst

MOSCOW, Aug 14 (Reuters) - Russian broadcaster Media-One, whose local partnership with Walt Disney Co DIS.N was blocked this year by the government, is instead partnering up with an oligarch loyal to the Kremlin, said a source close to the talks.

If the partnership -- which would jointly own and operate TV stations across Russia -- between Media-One and metals magnate Alisher Usmanov goes through, it will again indicate Russia’s airwaves are a strategic asset in which foreigners are not often welcome to invest.

Late last year, a government watchdog called the Federal Anti-monopoly Service torpedoed Google Inc's GOOG.O bid for a Russian Internet company, while in February it blocked the creation of a free, Disney-branded local television channel.

In its explanation of the move against Disney, the service said: “The anti-monopoly body takes the decision to refuse applications if the relevant information they contain turns out to be false.” [ID:nLK87916]

The source close to Usmanov told Reuters he is pursuing a deal to create a nationwide joint television venture with Media-One, which owns and operates around 30 TV stations across Russia.

“These talks are well underway,” the source said, confirming a report in Kommersant on Friday that the two sides were very close to a deal.

CLOSE CONTROL

Usmanov, whose business empire centres on his metals and steel company Metalloinvest, has also amassed one of the largest private media holdings in Russia. The jewel in its crown is the daily newspaper Kommersant, whose publishing house he acquired in 2006 for some $300 million.

The broadcasting landscape is still dominated, however, by the government, which directly or indirectly controls the main television channels and news agencies in Russia.

“Television influences the masses and everything that influences the masses is controlled very closely by the state,” said Svetlana Kravtsova, head of media analytics firm MediaAtlas.

“Usmanov is not known for tinkering with the editorial policies of his news outlets, but still, for the government it is much more comfortable having him there than any Americans,” she added.

Andy Bird, chairman of Walt Disney International, told Reuters in June his company was still interested in expanding in the Russian market despite the recent setback with Media-One.

Usmanov, who owns a stake in London Premier League soccer team Arsenal, often partners with state firms in large industrial deals and has been among only a handful of oligarchs to keep his business empire away from state control and regulatory scrutiny.

In 2007, he purchased the art collection of the late cellist Mstislav Rostropovich and donated it to the state -- the kind of move seen by analysts as necessary to stay in the Kremlin’s favour. (Editing by David Holmes)

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