Russian Giants Merge

The agreement saw Sistema enjoy a 51% controlling interest in the £75 million venture, with RWS holding the remaining 49%.

RWS’s studio facilities amounted to 13 sound stages covering 193,750 square feet and more than 180 acres of studio backlots, mostly in Anapa in the country’s Black Sea coastal Krasnodar region.   Although only formed in 1998, the company was the country’s leading producer of films and TV series.   Sistema were in the process of constructing a film studio in St. Petersburg at the time of the announcement and owned a production company called Thema which had co-produced English-language films such as Woody Allen’s Match Point.

Sistema VP Anton Abugov told a press conference that, ‘Sistema has contributed material and non-material assets. It has not made any considerable cash contributions,’ and that the joint venture was expected to generate £100-150 million in revenue each year.   RWS General Director Andrei Smirnov said his company planned to invest around £150 million in 2008-2009.

The move came at a time when Russia was in the midst of a film production boom – over 200 films were produced there in 2007, although most were DTV films.   Nevertheless, the boom meant that studio space was at a premium, especially in the south of the country where the climate is warm and dry and the long summers were ideal for filming.   Production was also boosted by political problems in neighbouring Ukraine, where, since January 2008, all Russian and foreign films had to be dubbed or subtitled for exhibition, resulting in the closure of cinemas by Russophone exhibitors in Russian-speaking parts of the country. (Sources: Variety/Reuters) [ADD]

2008

Russia:2008