Vendor Bankruptcies Emerge as Another Threat to Survival of Russian Newspapers

Paul Goble

            Staunton, Sept. 7 – Rising prices for newsprint which have forced papers to increase their prices, falling incomes in the population which is reducing subscriptions and sales, declining advertising revenue as companies shift to internet platforms and political pressure have combined to kill of many of Russia’s newspapers and threaten the survival of those that remain.

            But now another and perhaps even more immediate threat has emerged: Russian distributors who face bankruptcy themselves and who are using that legal tactic to avoid paying the newspapers what they owe them, according to Tatyana Nizhegorodskaya (versia.ru/srazu-neskolko-faktorov-skladyvayutsya-protiv-bumazhnyx-gazet).

            Over the last three years, the Versiya journalist says, most of the major distributors have either gone into bankruptcy and not paid the papers or have taken steps like closing kiosks or slowing the payment of money the papers have earned but not yet received in the hopes of keeping themselves afloat. 

            That hasn’t prevented the distributors from facing bankruptcy, but it has pushed many local and regional papers in that direction, leaving most of them with no choice but to shut their doors. At the same time, the distributors appear to be cooperating so that they can continue to operate other parts of their business even as they shed debts to papers via bankruptcy filings.

            Because many magazines are sold through the same distributors and their decreasing number of kiosks, it is entirely possible that many of them will be in trouble as well, although their situations may be less dire because they have more subscribers and fewer over-the-counter sales that the distributors are involved with.

            But this seems to be one of the rare cases where the destruction of the Russian media is less the work of the Kremlin than of the operations of businesses whose owners have learned as have many of their counterparts in other countries how bankruptcy is a way of shedding debt and protecting themselves, whatever the consequences it has for others.