Moscow Meets Fleet Street Can a Russian Oligarch Save the British Press?

Alexander Lebedev sees himself as the savior of Britain's struggling newspaper industry. He already owns the Evening Standard and is in talks to buy The Independent. But some suspect the Russian oligarch has ulterior motives.

Alexander Lebedev is sitting in the television studio of a Moscow news station. He is in demand on this particular morning. He likes being in demand, and he likes being asked questions.

Lebedev has just sold his share of Russia's state-owned airline Aeroflot, with the personal blessing of Prime Minister Vladimir Putin, in a deal worth €300 million ($411 million). The news caused something of an uproar in Moscow and elsewhere.


Photo Gallery: An Oligarch on Fleet Street

Foto: Jens Kalaene/ dpa

The Russian magnate is suddenly flush with cash, a fact that has the media abuzz in faraway London. The British papers suspect that Lebedev, 50, and his son Evgeny, 29, have now obtained the necessary cash that will allow them to finally buy the prestigious British daily The Independent.

"What nonsense. That amount of money is enough to buy the entire British press," says Lebedev, laughing, as he quickly pushes open the studio door.

Savior or Nemesis?

Many a journalist in Northcliffe House on London's Derry Street might find such self-confident talk off-putting. The building houses the editorial offices of the liberal Independent, as well as the Evening Standard, which Lebedev acquired in 2009. The question on everyone's mind is whether the Russian is the savior of the British press -- or its nemesis.

The Standard would probably have gone out of business without Lebedev. The Independent, too, is almost bankrupt. Negotiations on the sale have been underway for months. A deadline for exclusive talks was originally set for Monday, but the company has now extended it to Feb. 26. Although the deal may take a while, few doubt that it will materialize eventually.

The Russian billionaire's efforts have sparked hope and consternation in equal measure among British publishers. Lebedev once worked in London for the Soviet intelligence service, the KGB. In the Soviet Union's high-security embassy there, he searched the British press for news he could use in his classified reports to Moscow. Today Lebedev buys up the papers he once combed through. But that alone isn't enough to explain why he is so attracted to the London media.

Like Teaching the Russians How to Make Vodka

Lebedev, who holds a degree in economics, became a billionaire with bank deals and an investment in energy giant Gazprom. Since then, he has made his mark as a critic of the Kremlin.

In a partnership with former President Mikhail Gorbachev, Lebedev acquired a large stake in the Moscow opposition paper Novaya Gazeta,  where Anna Politkovskaya, a journalist murdered in 2006 who became an icon of press freedom, had worked.

"I want to help preserve a democratic institution in England," Lebedev insists. "Free media are as important as the parliament and political parties." It sounds incongruous: A billionaire from autocratically ruled Russia wanting to rescue the press in the motherland of liberal democracy. It's as if a British distillery had set out to teach the Russians how to make vodka.

All the same, the fears of Standard employees that Lebedev would convert the paper into a PR machine for a modern Russia have not come true. According to an editor at the newspaper, Lebedev does not determine how it reports on the Kremlin or British foreign policy. "We are not told to write certain stories, nor are we told not to."

"Everyone wants to know what Lebedev really has in mind," says Andrew Gowers, former editor-in-chief of the Financial Times and one of the most well-informed journalists in the British capital. Two weeks ago, a conservative member of parliament even proposed that Lebedev be required to testify before a parliamentary committee, and pointed out that there are "serious questions" about what motivates him to buy the Independent. He has already earned the nickname "mystery man" from the British press.

The Kremlin's Trojan Horse?

Some in London believe that Lebedev is the Kremlin's Trojan horse, and that it plans to use him to polish its tarnished image in the West. Others suspect that he intends to use the newspapers to print compromising material about top politicians in Moscow. This, they say, would allow him to protect himself against those in power by threatening to use the material for blackmail.

Another theory holds that Lebedev, who once campaigned unsuccessfully to become mayor of Moscow, craves political influence. According to yet another rumor, he buys newspapers to promote his other businesses: his bank, NRB, his agricultural holding company and his airlines. The rumors are as varied as they are unproven.

Journalists with the liberal, left-leaning Guardian spent an entire year searching for scandals, dubious interests or dirty deals. "We found nothing," says Stephen Brook, an editor at the paper. In fact, he says that the cantankerous and conservative Evening Standard has even become more politically balanced under its Russian owner, while at the same time lightening up its content to include more sex, more style and more fashion.

'The British Press Has Inspected Me with X-Ray Vision'

Lebedev himself simply laughs off the many theories that have been concocted about him. "It's all nonsense. The British press has inspected me with X-ray vision." He reaches into a bag of vitamin pills prescribed by his doctor. "Because of the bad air in Moscow," he says.

Lebedev conducts his business affairs from his mansion in the city. A large oil painting of a ship caught in a storm hangs above the massive wooden desk in his office. The latest business and market news flicker across the screen of a huge TV set in the reception room. "We have to think globally," says Lebedev.


Photo Gallery: An Oligarch on Fleet Street

Foto: Jens Kalaene/ dpa

He envisions a media empire which would include free newspapers in the Moscow metropolitan area and an international research network within a major media group. "You need super journalists and a super brand for that," he says.

A brand like The Independent. Although the paper is young -- it was only founded in 1986 -- it has cult status and is intelligent and urbane. Unfortunately, it also happens to be losing about €1 million a month. The editors have already gone through a number of cost-cutting measures. Last year, the owners managed to refinance the paper's debt, and since then the company has been under close supervision by the banks -- which might even be prepared to pay to get rid of the paper, which is considered a money pit.

The editors of the Independent don't know what to expect from Lebedev. Will the paper continue to print a Sunday edition? Will the editorial staff be combined with that of the Standard? Will the Independent also become a free newspaper? Such a move would be a frontal attack on national competitors, who are trying to get readers to pay more for their papers.

"Oh, come on," says Lebedev, "I'm not about to rescue a paper just to drive others like the Times and the Guardian out of business." Posing as the savior comes easily to Lebedev: He would only create more competition for himself with another free paper.

Unique Experiment

When he turned up at the Evening Standard last year, the editors of the 182-year-old, deeply traditional newspaper were initially shocked. Editor-in-chief Paul Dacre, his hands shaking, read an announcement from the publisher. "It's a very sad day for the paper," he said. The fact that Lebedev had allegedly been given the Standard for only 1 pound (€1.15 or $1.57) and that he converted it into a free newspaper in October was a blow to the self-confidence of the editorial staff.

But since the free paper began appearing in the late afternoon at newspaper stands and kiosks, circulation has risen from 250,000 to more than 600,000. Lebedev wants to increase circulation to about 1 million and is investing close to €34 million in the paper.

The Standard also benefits from the fact that the competition has folded. Media mogul Rupert Murdoch and the publishers of the Daily Mail, who competed with free city newspapers for years, closed their free papers when losses became too high.

Whether the Standard will be able to survive on advertising revenue alone remains to be seen. Lebedev's experiment is unique, and not only in Britain. Unlike most free newspapers, the Standard is not some carelessly cobbled together publication which only exists to provide a platform for advertising, but a real newspaper that is read by London's higher-income commuters.

The editorial staff is smaller, now that more than a dozen editors are gone from a total of about 180. But Lebedev is optimistic and believes that the Standard could be profitable again within three years.

Meanwhile, he derives as much pleasure "from a newspaper as others do from yachts and football clubs, which also burn up cash," says Justin Byam Shaw, a family friend who also helps run the Standard today.

Important Voice

The paper has made its new owner a part of London society and the city's publishing world. The Standard is an important voice in London, and Lebedev enjoys the fact that it is a voice that is heard. Although Novaya Gazeta at home in Moscow has given him the reputation of an idealist and champion of freedom of the press, "it is mainly perceived as an opposition paper in Russia, says Shaw.

Since Lebedev has owned the Standard, he has been one of Russia's most influential voices in the West. Shortly after the paper was sold, both Prime Minister Gordon Brown and opposition leader David Cameron met with the new publisher on the same day.

The oligarch named his friend Geordie Greig, who had previously managed the society magazine Tatler, as the new editor-in-chief of the Standard. The two men have known each other since the Lebedevs asked Greig whether the Tatler would write a story on a lavish party they were giving to benefit the Raisa Gorbachev Foundation for children with cancer. In addition to reporting on the party, Greig helped organize the event, which was held at Althorp, the residence of Princess Diana's family.

It was Lebedev's son Evgeny who established the connection. His father has also given him some of the responsibility for the Evening Standard, despite the fact that the 29-year-old, who grew up in London and lives there today, had previously made headlines as a party animal. Evgeny Lebedev is also the owner of expensive restaurants and was, for a brief time, the boyfriend of former Spice Girl Geri Halliwell.

The younger Lebedev was a subject for the media, not a media maker. "Playboy Raises His Standard," was the Times' headline in a story about the billionaire's son shortly after his father had acquired the paper.

No Time for Partying

"Of course I went to parties," says the son, "but I don't have time for that anymore." It is the beginning of the week, and he is sitting on the terrace of the family estate in the hills of Umbria, not far from Perugia. The 17th-century palace is also a luxury hotel. Evgeny likes taking care of the furniture personally.

After obtaining a degree in business, he worked at the Christie's auction house. He loves modern art and is well-versed in Italian Renaissance architecture. He now spends two days a week learning the ropes at the Evening Standard. Is it possible that his father bought the paper in part as a serious toy for his son? "Maybe so, subconsciously," he says.

Since the Lebedevs bought the Standard, people are suddenly interested to hear what the son has to say about London's cultural life. "The Standard is an institution, a part of the British establishment. We are proud that it's surviving," says Evgeny.

With his carefully trimmed, dark beard, and his slim physique, he looks like a descendant of the last czar. He hates the word oligarch, because it sounds too much like stupid money. "We have ourselves to blame for our image, given the vulgar way many Russians behave," he says.

Promoting Russia

Putin, too, is concerned about the poor image of the country, its politicians and its businesspeople. The prime minister held a closed-door meeting with senior editors and media executives last fall in the Black Sea resort town of Sochi, the site of the 2014 Winter Olympics. Over squid carpaccio and Chilean sea bass, the editor-in-chief of the country's largest tabloid newspaper even proposed buying the English tabloid Sun, "if the government gives us enough money." He could be sure of scoring points with Putin with his idea.

There have also been other takeover attempts. For example, Sergei Pugachev, an oligarch and friend of Putin, purchased the French newspaper France Soir through his son Alexander.

The senior Lebedev doesn't know anything about orders from the Kremlin. He was not invited to Putin's meeting in Sochi. Nevertheless, he shares the prime minister's desire to improve Russia's image abroad. "My country is more than police officers who break up protesting retirees with rubber batons," he says. "And contrary to what the mayor of Moscow believes, there is more to promoting us abroad than matryoshka dolls and balalaika music."

Lebedev knows that any open exertion of influence on his papers would harm his reputation. He no longer tears articles out of newspapers anymore, preferring to give instructions to his employees instead.

He recently noticed an article about the latest real estate prices in a Moscow business paper. Lebedev believes that someone ought to investigate certain dodgy real estate deals involving the mayor's wife. He knows that information is worth money.

Translated from the German by Christopher Sultan
Die Wiedergabe wurde unterbrochen.