Medusa Project

The Meduza edition is published in Latvia, but is aimed primarily at readers from Russia. The project was launched in October 2014 by a former team Lenta.ru.

From April 23, 2021, it is included in the register of media performing the function of a foreign agent.

Owners

As of January 2016, from the moment of its foundation, the only shareholder formally is Galina Timchenko.

In 2020, it was mentioned that for several years the former head of the presidential administration Alexander Voloshin has been the key "investor" of the project.

Edition

As of September 2014, the Riga edition of the publication has a little more than 10 people (except for the development). Special courts and a commercial service remain in Moscow.

As of February 2015, Meduza has 20 employees, including special correspondents.

As of January 2016, there are 25 people on the staff of the publication, the average monthly salary "on hand" is about €3.5 thousand euros.

Performance indicators

2022: Sharp reduction in audience and income after blocking in Russia, debt €579.5 thousand

Due to the blocking in Russia after the outbreak of the conflict in Ukraine in March 2022, Meduza began to rapidly lose its audience. Only from September to November, the resource lost 23% of visitors, calculated RT using the SimilarWeb statistics service.

So, in November, the site was visited 35 million times, while back in September, the monthly audience was 46 million users. The largest share of visitors is still made up of readers from Russia, but their number is steadily decreasing - on average by 25% every month. As a result, the site sank 2.5 times in the ranking of Russian-language media - from 181st place it fell to 333rd.

The outflow of readers and difficulties with transactions from Russia abroad significantly affected the income of Meduza, which received many donations from readers - they accounted for a significant share of its income. The editors had to turn on the saving regime and cut the previous budget by 40%, according to documents at the disposal of RT.

"After the introduction of Western financial sanctions, all payments from Russia (including donations and advertising revenues) were completely stopped," - written in the annual report of the Medusa Project, published by the register of legal entities of Latvia.

To compensate for the losses, Medusa launched a crowdfunding program for a European audience, but did not gain half of what the Russians listed.

"The organization launched a crowdfunding campaign in the West, asking readers of the English version of the site to help the publication," the report says. "As a result, we were able to replenish less than half of the regular donations that were previously received from Russian-speaking readers."

Now, the document says, the editorial board had to focus on international grants.

"The company does not yet see an opportunity to restore its monetization model and expects donations from readers and grants from international organizations supporting independent journalism," the document says.

What is happening in Medusa is called an "emergency." As RT found out, the publication was forced to seek additional support from its sponsors and agree on the restructuring of old loans. Now the total amount of Medusa Project debts has grown from €184.9 thousand to €579.5 thousand^[1]

2021: Loss of 80% of advertising revenue after recognition as a foreign agent in Russia

The editors of Medusa published an annual report for 2021. After being recognized as a foreign agent in April 2021, the publication lost 80% of advertising revenue. The founder of Medusa, Galina Timchenko, wrote that "the April events have become one of the most serious crises" for her media.

2016

On October 20, 2016, the publisher of Meduza, Ilya Krasilshchik, in honor of the biennial edition, published statistics for September. The main generator of the publication's revenue was native advertising. During the year, 180 materials of this type were published^[2].

2015: Revenue €969.6 thousand, loss €1.1 million

In general, 2015 ended with a loss of €1.1 million for Medusa, which almost doubles the company's revenue, follows from the reporting of the Latvian company Medusa Project SIA for 2015.

The ratio of losses/profit and revenue for the first full year of operation improved slightly - if at the end of 2014 the negative profitability was minus 330.4%, now it is minus 203.5%. In 2015, the company's losses increased to €1.13 million with revenue of €554.3 thousand^[3].

- In general, this is a typical reporting for Internet media with a rapidly growing audience, which is Meduza. Shareholders are deliberately funding these losses to keep the growth rate strong. That is, shareholders are ready to invest in good operating results, the number of visitors, audience coverage, views, and so on, - said Timur Nigmatullin, financial analyst at Finam.

The report states that Medusa exceeded the plan for the planned audience size provided for in the business plan. The business plan itself is not given, but the data for December 2015 are indicated (3.14 million users on the site - planned 3.109 million). The number of users of the mobile application increased by 63%, reaching 201 thousand users per month, and the number of users of social networks is also increasing: on Twitter 365 thousand people, Facebook - 71 thousand and VKontakte - 121 thousand people. Similar figures were announced earlier by representatives of the publication.

With reference to fluctuations in the exchange rate ruble , the company notified of the revision of its plans for 2016-2018 - the achievement of break-even was postponed from 2016 to 2017. According to the company, net losses for 2015 were 30% lower than planned.

In 2015, production (in 2015 - €1.7 million, in 2014 - €230 thousand) and administrative costs increased sharply (in 2015 - €415.4 thousand, in 2014 - €122.1 thousand). As in all media, the main item of expenses is salaries: more than €1.06 million (plus €235 thousand taxes) were spent on the salaries of the editorial staff and its leaders, another €509 thousand went to various freelancers.

The average salary at Medusa is several times higher than the average salary in Latvia, according to one of the Riga audit firms. Indeed, based on a staff of 25 people, the average monthly salary per hand is about €3.5 thousand euros, while the average Latvian earns about €900. Even taking into account the fact that 3.5 thousand is the average temperature in the hospital, such amounts, according to research by specialized Latvian companies, are received by high-level managers. At the same time, the main product of Medusa is repackaged other people's news.

The Riga audit company Finansists clarified the salary of Meduza employees:

"Salary fund - 1,292,164 euros: main personnel - 852,121 euros, administration - 204,941 euros. 1,292,164 minus 10.5% (social tax), minus 23% (income tax) - equal to 890 495/25/12 - equal to 2968 euros per hand. But this is a very conditional calculation, since when the ceiling of 48,600 euros is reached, the salary is not subject to social tax (the rule of law in 2015). There are still non-taxable lows: these are deductions of 75 euros per month per person and for dependents - 165 euros per month. But not everyone has. "

When Medusa recruited newcomers to the team, salaries in ads were from €1.1 thousand to €1.6 thousand.

The cost of the premises is relatively low: €26.4 thousand was spent on rent and utility bills. Until May 2015, Meduza was registered in a residential building on Dzirnavu Street (Melnichnaya), from May 2015 the company moved to one of the longest streets in Riga - Maskavas (Moskovskaya).

According to the columns of the financial report on other income, during 2015 Medusa received €969.6 thousand. As the Riga auditors explained, this column may also include grants, donations, infusions of shareholders. Of these, €351.3 thousand were spent, and €622.8 thousand remained at the disposal of the company. For 2014, this column is empty. At the end of 2015, the company's accounts were €502.6 thousand (a year earlier - €788 thousand) - this is real money in the company's accounts, their source is not indicated, said Anna Esemchik, an accredited auditor from Riga.

The publication has two outstanding loans, the volume of each is not disclosed - the report only indicates that the debt on them at the end of 2015 was €1.4 million (at the end of 2014 - €1.2 million); obviously, investments are registered through loans. As an analyst from a large Latvian bank explained to Life, these loans were taken from one lender. Loans have been issued from "other legal entities" - as Anna Esemchik and her colleagues explained, these are non-bank loans. At the same time, the reporting notes that since the enterprise has a lack of working capital, there is an agreement with the creditor to postpone the refund, the financiers specified. The document indicates the need to restructure the loans received - that is, you will have to postpone the maturities.

One of the loans was received in September 2014 with a due date of September 15, 2016. Another one was taken in July 2015, it is necessary to pay off its Medusa Project on June 9, 2016. The rate on loans given in the financial account - 3% (the amount of interest paid was €42.3 thousand) - is about half the market rate, the surveyed analysts noted. The initial size of loans is not reported.

Galina Timchenko is the sole owner with a 100% stake in the authorized capital. Sponsors are ready to increase budgets.

History

2023: Publication declared an undesirable organization in the Russian Federation that poses a threat to the foundations of the country's constitutional order and security

The Meduza edition in January 2023 was announced by the Prosecutor General's Office as an undesirable organization that poses a threat to the foundations of the country's constitutional order and security.

Journalists of the publication called the status a de facto ban on work in the Russian Federation, because now criminal prosecution threatens leaders and correspondents, as well as those who distribute materials and finance the media.

According to Russian law, these actions can turn into an administrative offense: from 5 to 15 thousand rubles.

2022: Blocking in Russia after the outbreak of conflict in Ukraine

On March 3, 2022, the site and the mobile version of Medusa were blocked in Russia. In its statement, Roskomnadzor explained that it had imposed restrictions on the resource due to calls for riots, extremism and participation in illegal actions.

However, 2022 has become even more difficult for the company. "Military censorship has been introduced in the country... punishments for calls for war and discrediting the army, "writes Galina Timchenko, co-owner of the Medusa Project, in an annual report for the Latvian authorities. "Under these conditions, the company was forced to evacuate more than 20 journalists from Russia."

2021: Publication in Russia recognized as a foreign agent

In April 2021, Meduza was officially recognized in the Russian Federation as a foreign agent, since the legal entity SIA "Medusa Project" is registered in Latvia. The decision was made by the Ministry of Justice.

"Meduza is appealing the inclusion of foreign agents in the list," said Galina Timchenko, general director of the publication.

2016

Summer school for journalists "Farm"

Medusa is working to "popularize its activities." In the spring of 2016, the publication is preparing an educational project, the summer school "Farm" - "for journalists and those who manage them." During the week in Riga, Meduza journalists will share their experience and promise to tell "everything they know about journalism and the device of the media." The number of people wishing to go to the master class exceeded 500, and is ready to train Meduza only 50, said the editor-in-chief of the publication Ivan Kolpakov (Timchenko lost her post in January 2016, remaining the general director).

Since January 2016, Meduza, together with the InLiberty project, which belongs to the Center for Cultural and Socio-Economic Education NGO, has been lecturing on the Return of Ethics. For nine months (January-September), scientists from different countries at free events "discuss the main political, social and economic problems of the world in terms of morality." According to the transcripts of the lectures, which are published on Medusa, they mainly discuss the situation in Russia at these lectures.

- On the survival scale near Russia - Serbia, Bosnia, Romania, Azerbaijan, Iraq, the Palestinian Authority, Yemen and Jordan. Here is Ghana - in Ghana it is much better with self-expression than in Russia. According to some values ​ ​ like the notorious tradition, Russia is among the most-most advanced and successful countries. According to the scale of self-expression - in the forefront of relatively problematic countries, - says Ella Panei, a sociologist, associate professor at the Higher School of Economics in St. Petersburg, in March transcripts of lectures.

American political scientist and secession specialist (withdrawal of the region from the state. - Approx. Ed.) Jason Sorens in April devoted his lectures to the topic of separatism:

"A lot

of governments don't allow it. Not only Russia, but also Turkey, India, Sri Lanka, Pakistan. There are secessionist movements in these countries, but speech in defense of secession is criminalized. "

Within the framework of InLiberty, other projects are being implemented on the internal policy of the Russian Federation.

• Political

  leaders and officials around the world are no longer shy about their criminal nature, the project's website says. "In any case, the" mafia state "ceases to be a metaphor and becomes a political reality with which something needs to be done.

Medusa and its partners have a clear niche - training Russians in freedom and active independence.

Kolpakov is the new editor-in-chief, Timchenko remains the general director

In January 2016, Galina Timchenko transferred the leadership to Ivan Kolpakov, and she herself remained as general director.

2015

Budget for the year $1.5 million

The budget of Meduza online media in 2015 will be about 1.5 million euros ($1.7 million), Evropeyskaya Pravda reported, citing Ivan Kolpakov, deputy editor-in-chief of Meduza. Meduza editor-in-chief Galina Timchenko clarified for Vedomosti that the media will spend a slightly smaller amount in 2015 - $1.5 million.

The media was launched with the money of several private investors, the company does not disclose their names. Investments are fixed in foreign currency, Timchenko said.

A significant part of the funds in 2015 was spent by the media and will still be spent on development, the editor-in-chief said.

170 thousand downloads of mobile application in 5 months

From October 2014 to February 2015, the Meduza mobile application was downloaded 170,000 times. The average weekly audience of this media in January 2015, according to TNS, 0.6 million unique users.

The peak attendance recorded by MediaMetrics occurred at the end of February 2015, 200-220 thousand visitors visited the site a day.

2014

Loss at the end of the year €159.6 thousand, advertising sales €48.3 thousand.

As follows from the reporting of the Latvian company Medusa Project SIA for 2014, the company's net losses triple its revenue. The negative financial result amounted to €159.6 thousand, it was possible to earn €48.3 thousand from advertising. Russian and Latvian financiers analyzed the reporting of Meduza for Izvestia and believe that without additional injections the publication will be able to hold out for another year or two (the company has about €800 thousand in its accounts).

At the end of 2014, Timchenko's new media turned out to be unprofitable, admits Evgenia Durnovo, head of the foreign reporting group at the consulting firm Amond & Smith Ltd. According to the analyst, the total amount of losses of €159.6 thousand has developed due to high production costs.

- In liabilities - large accounts payable, mainly "other creditors" (not disclosed in the statements), in the amount of €1.25 million, - Durnovo continues. In addition to this debt, the reporting also includes a smaller one - at €30,285. The newly created publication is still supported by investments from the outside, the analyst argues. Intangible assets for a fairly large amount of €327,822 are declared in the assets of the company, these may be trademarks or patents, Durnovo said. In all likelihood, the Meduza brand is estimated at this amount. Also, at the end of the year, the company's accounts showed a rather significant amount of €788,192 (of which 783 rubles, $297.9 thousand, €489.5 thousand).

As of December 31, 2014, the total staff of the company was eight people, the cost of their salary for the reporting period (excluding social benefits for pensions, medical insurance, etc., in Latvia, such insurance premiums amount to 35% of the salary) reached €176,877. According to the results of 2014, the publication recorded wage and tax debts in its reports, Durnovo said, according to the reports they "ran up" by €20,039 and €31,371, respectively; plus debt to suppliers in the amount of €1,671. The presence of these debts was also confirmed by the executive director of the Latvian analytical company Smart Continent LV Ekoterm Gints Turlazhs.

The amount of €788.1 thousand will allow Medusa to hold out for another couple of years if the costs are not covered by advertising revenues, Turlags said. He noted that high expenses in the first months of development are typical for projects from many industries, and for online media at the initial stage of development to go into negative territory is normal^[4] of^[4].

Medusa does not hope to cover the loss with revenue in 2015, follows from the report.

"It was

not planned to achieve a payback in 2014, but a successful product was created that confirmed the interest of advertisers. The company expects planned losses in 2015 as well, investments in products should be completed, "the document says

.

Meduza expects an increase in revenues from advertising revenues, this year the online publication is counting on a 10-fold influx of advertisers, follows from the financial report. In addition to advertising, the publication plans to make money on purchases inside the application and introduce popular funding, crowdfunding, the leaders of the publication said earlier. Medusa plans to reach net profit by the end of 2016, the report says.

Khodorkovsky and Zimin do not participate in financing

In September 2014, it became known that the ex-owner of Yukos Mikhail Khodorkovsky and the son of the founder of the telecom operator VimpelCom"," the head of the board of trustees of the Dynasty non-profit program fund Boris Zimin will not finance the new project. According to Timchenko herself, who is quoted by "," Sheets the project will be launched with other investors.

Timchenko confirmed to RBC that Khodorkovsky and Zimin will not participate in the new project. At the same time, according to her, the change of investors will not affect the launch date of the media - it is scheduled for mid-October. At the same time, Timchenko refused to name new investors, talk about their number, as well as about whether they are individuals or legal entities. In a conversation with RBC, Timchenko added that the media will be called Medusa.

As Timchenko told Vedomosti, participation in the project of Zimin and Khodorkovsky failed due to the fact that Zimin insisted on gaining control over the operational activities of the editorial office. Khodorkovsky, who planned to enter the project as a passive investor, said that his participation in the project had ceased due to the failure of the agreement between Timchenko and Zimin.

The representative of Khodorkovsky confirmed to RBC that negotiations with Timchenko did not lead to anything. Boris Zimin does not talk about the specific reasons for his decision. "They just didn't agree, period," he told RBC. He has no idea who the new investors are, but is confident that Timchenko and her team will find the money. "I respect Gala and her team and I think they are in a position to find investors"

According to Timchenko, new investors are "not public people, some of them are from Russia, some are not, they have nothing to do with politics or media,"^[5].

Galina Timchenko creates a company in Latvia

In June 2014, the former editor-in-chief of the largest Russian news online resource Lenta.ruGalina Timchenko established Medusa Project SIA in Latvia. This is evidenced by the data of the Latvian commercial register. Timchenko confirmed to Izvestia that she is the sole owner of^[6].

In July 2014, Medusa registered in the Riga tax office, and in August began recruiting on Latvian recruiting portals - in the new Russian-language online media.

The authorized capital of Medusa Project SIA is €2.8 thousand. SIA is an analogue of a Russian LLC, the declared authorized capital must be paid immediately by at least 50%, another 50% must be contributed within a year after registration. The only owner of the Medusa Project with a 100 percent share is a citizen of the Russian Federation Galina Timchenko. In July, the company registered as a taxpayer, in a residential building (34A Dzirnavu Street, 12A Apartment) in the Central District of Riga, Riga residents like to call it quiet; nearby, by the way, the Russian consulate.

The area of ​ ​ apartments in the 34A house on Dzirnavu Street reaches two hundred square meters, so it is quite possible that the editorial office will work here - interviewed Riga realtors said that offices are often located in apartment buildings in this area, this is a common practice. Timchenko refused to explain whether the editors of the new edition will work at this address. When asked who owns the apartment, whether she will rent them, the interlocutor was also harsh: "It's not your business, it's a private story."

The agreement on the dismissal of Timchenko from Ленты.ру contained an obligation not to lead the media and not to create them from March 12 to June 12, 2014. Medusa Project was registered, however, two days before the end of this embargo, on June 10, but whether Timchenko violated the agreement is a controversial issue, because the media itself is still not.

It is known that part of the editorial office of the new edition will be those employees of the Lenta.ru who left with Timchenko, the other part of the state - recruits. Izvestia found that this month, on such Latvian HR resources as Visidarbi.lv, Irdarbs.lv and CV.lv, as well as on the portal of the Latvian State Employment Agency, vacancies appeared for editors, correspondents, managers and employees of the photo service of the news portal. Medusa Project SIA is indicated as the employer, contact email is the address on Gmail, which previously surfaced as Timchenko's personal mail.

Timchenko told Izvestia that she posted these ads at the request of Latvian legislation. A lawyer practicing in Riga, Alexander Khrulev, however, did not hear about such an obligation of legal entities.

Descriptions of all vacancies from Medusa Project are compiled in Latvian, they contain a requirement for excellent knowledge of Russian and English - Latvian is not needed. All employees are also required "excellent knowledge of Russian socio-political, social and economic realities, general ideas about the world socio-political and economic order."

In some vacancies of correspondents, the requirement for residence is indicated - Moscow (with the possibility of business trips around the country), while there are no requirements for the correspondent of the policy department at the place of residence. In April, Timchenko said that her plans did not concern "the creation of any media that will write about politics." The vacancy of the manager of the new publication, who is responsible for working with freelance workers, special projects, coordination in the company and working with the back office (lawyers, accounting, Internet, rent), says that he will be selected for Russian business trips at least once a quarter. Salaries in ads are indicated in the range from €1.1 thousand to €1.6 thousand.

In July, businessman Mikhail Khodorkovsky, amnestied in 2013, announced that he would finance Galina Timchenko's new socio-political media, and he emphasized that he would not be a sponsor, but an investor in the project, that is, a co-owner. Among other investors, the son of the founder of the mobile operator VimpelCom Boris Zimin was also named. However, Timchenko then indicated that this was her project, and not Khodorkovsky. Zimin could not give an operational comment, and the representative of Khodorkovsky Olga Pispanen confirmed to Izvestia Khodorkovsky's intentions to invest Timchenko as a shareholder in the new project - but whether he had made any contributions at the moment, the interlocutor refused to report, addressing for all the details to the head of the new media.

- Will want - will be included [in the composition of shareholders]. I'm not responsible for Khodorkovsky, "Timchenko told Izvestia. - Under what conditions [he can enter the capital of Medusa Project], I do not comment.

She said that the new media will not be called Medusa, but otherwise. Why Medusa? - "Just because." Regarding the staffing table, the interlocutor noticed that it was "very modest, this is a microproject." According to Timchenko, the site of the new project has not yet been established, and the state now has only one. Timchenko found it difficult to name the launch date.

Media manager Anton Nosik, who founded the Lenta.ru and worked as the chief editor of this resource until 2004, believes that it will be difficult for Timchenko to do without an investor at the initial stage. According to the interlocutor, the annual budget of Timchenko's new project will be at least $1 million.

- Based on the minimum state estimate of 15-20 people, whose monthly salary will be $2-3 thousand, the annual wage fund will be at least $0.5 million. According to a rough formula in such intellectual plan projects, employee salaries make up half of the costs, the rest of other costs are rent, back office, etc. As for income, advertisers who will not be afraid of the opposition mood of the new resource are. In addition, by 25-30% now it is quite possible to be financed by contributions from readers, - explains Nosik. Why Riga? By distance as Petersburg (an hour by plane), but the eurozone [Latvia entered the euro zone on January 1, 2014]. The cost of living and doing business is very low by Russian standards. At the same time, the city with the majority of the Russian population, that is, a very easy adaptation (if compared with some Berlin or Switzerland). The remaining reasons are of a personal nature.

From the point of view of the availability of materials, it is difficult for readers to explain the choice of Latvia, says Artem Kozlyuk, project manager of the Pirate Party RosKomSvoboda. According to him, today there are no reliable ways to avoid blocking Roskomnadzor for "extremism." Kozlyuk advises Timchenko to prepare a pool of IP addresses and dozens of "mirrors."

Galina Timchenko stressed that there were no political motives that influenced the basing in Latvia - "exclusively economic considerations." Sergey Nazarkin, partner of Amond & Smith, which advises those wishing to take advantage of foreign jurisdictions, notes that Latvia is a popular alternative to Cyprus.

- Latvia has a rather attractive tax regime, relatively low tax rates for the European jurisdiction (corporate income tax rate in Cyprus is 12.5%, in Latvia 15%) and not too complicated tax administration. Unlike Russia, Latvia lacks currency control, the expert explains. - In addition, the legislation provides for a preferential tax regime for the distribution of dividends for the Latvian company, and there is a developed network of agreements on the avoidance of double taxation with other countries. A plus for Russian businessmen will be the fact that a legal assistance agreement is in effect between Russia and Latvia, thanks to which there are no requirements for the legalization (apostilation) of Russian documents provided in Latvia, and vice versa.

However, according to Dmitry Petrov, head of the Latvian law firm Petrovs & partneri, the tax rate on personal income in Latvia - 24% - significantly exceeds Russian 13%. The employer also deducts social contributions to state funds (for pensions, medical insurance, etc.) - in the amount of 35%, against Russian 30%.

Notes