BUSINESS

Ink-stained riches

Moscow’s first business newspaper is a hit

MALCOLM GRAY April 22 1991
BUSINESS

Ink-stained riches

Moscow’s first business newspaper is a hit

MALCOLM GRAY April 22 1991

Ink-stained riches

Moscow’s first business newspaper is a hit

BUSINESS

The most common way of judging a newspaper’s impact is to measure its circulation. Journalists, however, sometimes rely on another yardstick: the degree to which the paper arouses the interest, and anger, of the high and mighty. By either of those standards, the Soviet Union’s first business newspaper, Commersant, or Businessman, has scored a striking early success. The lively, 15-month-old weekly now claims a circulation of almost 500,000.

And the Moscow-based tabloid has already incurred the wrath of President Mikhail Gorbachev. In a speech to the Soviet legislature in January, Gorbachev targeted the paper during a wide-ranging attack on news coverage of his government’s military crackdown in the Baltic republics. Declared Gorbachev: “All publications, from Pravda to Commersant, should be objective and reflect various views.”

Gorbachev’s criticism, which has placed Commersant at the opposite end of the political spectrum from Pravda, the official organ of the Soviet Communist party, apparently pleased Vladimir Yakovlev, Commersant’$ 31year-old founder and editor. But Yakovlev takes just as much pride in Commersant’s financial performance.

Even though he doubled the cover price to one ruble (40 cents at the official exchange rate, or roughly the same price as a loaf of bread in Moscow) last fall, sales are still climbing. Yakovlev says that each issue now yields a profit of about 125,000 rubles on revenues of 375,000 rubles—a healthy 33-per-cent margin. Commersant carries a few advertisements in each issue, but most of its earnings come from newsstand sales. As well, Commersant’s English-language edition sells almost 20,000 copies a week at a hard-currency price of $2.30. Indeed, Yakovlev sounds like a Western newspaper baron when he discusses his plans to attract more affluent and powerful readers. “The Russian edition had good sales at the old price,” he says. “Too good, in fact. We want Commersant to be read by upper-level managers, and we were not reaching them.” Whether readers pay in rubles or hard currency, Commersant provides them with a business-oriented mix of news ranging from political and legal coverage to a detailed and largely unprecedented monthly report on Soviet consumer prices. The report, entitled “Consumer Basket,” monitors the prices and availability of 239 items—everything from bread in sparsely

stocked state-owned stores to imported boots on the black market.

Yakovlev has also introduced several Western editorial and business practices to Soviet journalism. For one thing, Commersant livens its fact-filled stories with biting headlines and irreverent cartoons. And Yakovlev has set up a managerial structure that is designed to minimize costs. The paper has only six permanent employees—each of them department heads. At first glance, their salaries of $9,500 a month each appear lucrative.

But out of that, they have to cover their department’s production costs and buy articles from freelance writers.

Yakovlev also penalizes editors for missing deadlines.

“One department recently paid a 15,000-ruble fine for a series of foul-ups,” says Yakovlev. “But the fines are usually much smaller—about 15 rubles a minute for missing a copy deadline.” The

money, he adds, is channelled back into the paper’s general budget.

Despite his youth, Yakovlev had extensive experience in journalism and business before he launched Commersant. His father, Yegor, is the editor of Moscow News, a politically liberal weekly that was one of the first newspapers to print stories critical of the Soviet government under Gorbachev’s glasnost reforms. The younger Yakovlev has worked for several Soviet publications, including the weekly newsmagazine Ogonyok (Beacon). In 1986, he helped found Fact, a private Soviet news service.

Yakovlev has relied heavily on several friends and colleagues from the West to help get Commersant running. The Refco Group Ltd., a Chicago-based currency futures and options trading firm, donated word processors and other equipment in exchange for free advertising and a share in future profits. Huhtamaki, a Soviet-Finnish joint venture that supplies the Soviet market with goods ranging from medical supplies to liqueurs, is another partner. Huhtamaki’s Moscow representative, Jouni Makitalo, says that Commersant is the ~ only paper that covers the £ frequent changes in the counts; try’s business climate.

I But Makitalo and other for1 eign readers say that there ^ are problems with the English edition—many of the articles are too long and the translations are often awkward. In addition to business coverage, the newspaper includes lurid crime reports that many Westerners say are overly graphic. But Michael Hetzer, a 30year-old American who edits the English edition, says that Commersant’s coverage of crime stories is a distinctively Russian feature of the paper and that editors of both editions are reluctant to alter it.

Still, Hetzer concedes that he was tested in February when a front-page article about Soviet economic prospects in the Russian edition was accompanied by a cartoon depicting a thermometer protruding from a man’s buttocks. Hetzer says that he swallowed hard—and ran a smaller version of the cartoon z on an inside page. Clearly, he g was reluctant to abandon I completely a formula that has 1 produced profits as well as 5 controversy.