A related note of some timeliness this week, Egmont International’s Nordisk Film division has a nominee in the Academy Awards—the annual awards show is Sunday night (February 26). ‘Land of Mine,’ set in World War II Denmark, is nominated for a Best Foreign-Language Film Oscar.—Porter Anderson
By Eugene Gerden
Shareholders Now Control Egmont RussiaThe Danish media corporation Egmont International has exited the Russian children’s book market this month, selling 100 percent of Egmont Russia to shareholders.
The company had been working in Russia for 27 years, but is reported to have made the decision to divest because of Russian legislative restrictions on foreign capital in local media and continuing challenges in the Russian publishing market.
Among shareholders who now control the company is Leo Elin, president of the company—with what Kommersant reports is a 68.8-percent stake—as well as Oleg Vishnyakov and Andrei Kocharov, both of whom are well-known players in the Russian publishing business.
The amount of the transaction isn’t known but news reports have suggested that it’s in the range of some €10 million (US$10.6 million).
According to analysts of the ministry of science and education, those new legislative restrictions introduced a ban on the foreign ownership of more than 20 percent of a domestic media concern.
In speaking to Publishing Perspectives, Elin says, “In order to comply with new legislative requirements, Egmont had begun to move its publishing business into a separate legal entity. But the process wasn’t complete, and the Danish company decided to completely withdraw from the Russian market.
“The Danes didn’t like the idea of an intermediate company. It would be a loss of control for its Russian business and contrary to the business principles of Egmont.
“The situation is aggravated by the crisis in the Russian book publishing market.”
The new owners have said they plan to start rebranding the business by the end of this year and to change its name in 2018.
Children’s Books in the Russian Market
Egmont Russia currently produces 1,200 books and some 40 magazines annually and is among the top three publishers for children in the country. The magazines, according to the company’s literature about itself, sell at a total annual circulation of some 2 million copies.
In 2016, the company’s performance fell by 12 to 13 percent, which nevertheless surpassed figures that showed the market falling 16 percent. A loss of points of sale is is blamed for the downturn, particularly in the Russian network of bookselling kiosks.
According to Oleg Novikov, president of Russia’s leading publishing house Eksmo-AST, children’s literature represents some 22 percent of the Russian market in units. In value, children’s books in 2016 showed an increase of 8 percent, up to 17.5 billion rubles (US$309 million). Novikov’s Eksmo last year published close to 1,800 children’s titles and sold some 12 million copies of them.
According to Novikov, children’s reading remains the most promising sector of the Russian publishing market.