Faded “Melody”

“Commersant Ukraine” Newspaper (Ъ), N 146 dated 03-09-2009

Large radio-network was not able to pay for the license

Radio “Melody” – one of the largest radio-networks in Ukraine – has been deprived of its license. It is the first known decision taken by the National Council for TV and radio broadcasting issues with regard to such a large broadcaster. The company was not able to pay UAH 4.2 million for the license and now its frequencies can be offered for bidding. According to the experts, all the largest players of the market will bid for them in this case – as the broadcasting station coverage is more than 30 cities.
The National Council for TV and radio broadcasting issues had to cancel the license of JSC Onix, managing the Radio “Melody” network, based on the prescription by the Prosecutor General’s Office, as stated the First Deputy Head of the National Council Andrey Miroshnichenko at the council meeting. The broadcasting company’s payment for the license was incomplete - amounting to just UAH 255 thousand instead of the required UAH 4.2 million.
Based on the data of TNS Ukraine, the “Melody” radio is the eighth largest network in Ukraine according to its average daily coverage (MMI Ukraine 2008/4 + 2009/1): 769.8 thousand people (i.e. 4.8% of the population at the age of 12-65, living in the cities populated by more than 50 thousand persons). Its owners are the entrepreneurs Andrey Karpiy and his father Stanislav.
Conflict between the “Melody” owners and regulator has been a long story. As reported to the editorial staff by a source from the National Council, the “Melody” received several notifications from the regulator regarding violation of the license conditions. In response Stanislav Karpiy filed several claims to nullify the regulator’s notifications. Recently several people’s deputies have got involved in the conflict: according to Mr. Miroshnichenko, he was requested by Yuriy Karmazin (from “Nasha Ukraina - Narodna samooborona”) to postpone consideration of the case. And the National Council member Tatyana Lebedeva stated that prior to that she had been requested to consider possible cancellation of the “Melody” license by another people’s deputy, whose name is not disclosed. Yesterday Andrey Karpiy refused from commenting that, and it was not possible to get in touch with Stanislav Karpiy.
Legal position of the National Council in this case is very strong and its disputing will be extremely complicated, says Mykola Podpalov, partner of Volkov Koziakov and Partners Law Firm, who represented the interests of “Gala-radio” broadcaster in a similar dispute. “A license can be extended on the basis of the paid license fee. If the payment is not made, the National Council has a right not to extend a license and to offer the frequencies for bidding”, he notes. Possibility of bidding for the “Melody” frequencies is also being discussed by the National Council. “The broadcaster frequencies are very interesting. The network covers more than 30 cities, including the regional centers”, informed the “Tavr Media” Chairman of Board (Russkoye Radio Ukraine, Hit FM and Kiss FM) Igor Chernyshov. “If such tender is announced, it will be a serious struggle, as we won’t be the only participants”. According to Mr. Chernyshov, now it is not so easy to assess the market value of the radio-company, but before the recession the network could generate about UAH 500 thousand of monthly earnings. “The network is as large as the “Nashe radio” broadcaster that was sold for USD 15 million, as far as I know (“Ъ” reported on the referred transaction on 27 January 2006)”, added Igor Chernyshov.

Irina Ъ-Mironova