PRESS: MegaFon to become co-owner of online cinema Start

MOSCOW, Oct 28 (PRIME) -- Russian mobile operator MegaFon is acquiring 33.8% in Digital Media Holding, a parent company of holding Start, owner of 74% in the namesake video service and studio, and will invest up to 5 billion rubles in development of Start in the next three years, business daily Vedomosti reported on Wednesday.

MegaFon’s effective share in the video service and the studio will be 25% each. MegaFon’s General Director Gevork Vermishyan said the deal does not stipulate any structure changes for Start or exclusive terms of cooperation.

Digital Media Holding’s co-owners are founders and general producers of producer company Yellow, Black&White (YBW) Eduard Iloyan, Alexei Trotsyuk, Denis Zhalinsky, and Vitaly Shlyappo. Start’s General Director Yulia Mindubayeva has 5%. A Start representative said that after the deal with MegaFon, their stakes will change proportionately.

Media market sources told Vedomosti that Start’s founders had been looking for a strategic investor since long ago as they needed money to create exclusive content.

Media reported earlier that a part of stakes of Digital Media Holding’s co-owners were pledged as security with MegaLabs, a unit of MegaFon.

A MegaFon official said MegaLabs will become the actual shareholder of Digital Media Holding. The deal will be done in two stages and will be closed in November.

Start said its revenue was at about 1 billion rubles in 2019, including incomes from subscription and distribution of the rights.

Researcher J’son & Partners Consulting estimated the market of legal video services at 41.2 billion rubles in 2019.

(76.4556 rubles – U.S. $1)

End