CTC boss faces lawsuits


Alex Rodnyansky, the former president/CEO at CTC Media, has apparently fallen foul of a ‘non-compete’ clause in his departure document. CTC Media says Rodnyansky, still a non-exec at CTC, has allegedly “been involved in the business of one of the Company’s competitors in Russia and has acted against the best interests of CTC Media.”

“These activities are in breach of Mr. Rodnyansky’s contractual obligations to the Company and his fiduciary duties as a Director of the Company. CTC Media has therefore [Nov 9] filed civil complaints in the Supreme Court of the State of New York for the County of New York and the Delaware Chancery Court against Mr. Rodnyansky, in order to protect the interests of the Company and its stockholders.”

“In addition, the Company’s principal shareholders - Alfa CTC Holdings Limited (“Alfa”) and MTG Russia AB (“MTG”) – have today issued written notice to Mr. Rodnyansky that they no longer support his remaining as a member of the Company’s Board of Directors. Pursuant to Mr. Rodnyansky’s agreement with the Company, Mr. Rodnyansky’s irrevocable resignation from the Board of Directors will become effective 90 days after the receipt of such notice, which will be on February 7, 2010. Mr. Rodnyansky was appointed to the CTC Media Board of Directors in November 2008.”

Away from the courtroom CTC is doing rather well after a challenging year. Investment bankers Morgan Stanley, in a note to clients, say they are upgrading their forecast share price from $13 to $15, and suggest that the broadcaster is well placed to bounce back as and when Russia’s ad-market returns to normal. “CTC would be a major beneficiary from faster than expected macro-growth,” says the bank. “TV is taking share of advertising and CTC's share is up 300bps YoY. Audience share is robust. Operational gearing is enhanced by excellent cost control (flat underlying in 2009) and high weighting to in-house content reduces inflation risk. A rising cash pile ($56m in Sept, forecast >$400m in 2011) enables investment potential. However, our $7 Bear case scenario is very significant should advertising drop further in 2010.”

Instead, the bank gives a Bull Case target of an impressive $24 if Russia’s economy improves.