Forbes remembered the debts – Newspaper Kommersant No. 203 (7404) dated 11/01/2022

The Russian Forbes, which has suspended the release of the print version due to a sharp drop in advertising revenue, is starting to sue advertisers. The publication filed a lawsuit against the Roust holding due to a debt that was formed back in 2021. Publishers in general rarely sue advertisers, market participants say, and they usually manage to reach an agreement. But in a crisis, publishers can no longer provide long-term payment deferrals to customers, regardless of the size of the debt.

“Kommersant” found in the filing cabinet of arbitration cases that JSC “AS Rus Media”, which manages the Russian magazine Forbes, filed a lawsuit against one of the structures of the Roust holding (produces alcoholic beverages “Russian Standard”, “Green Mark”, etc.) – CJSC Rust Incorporated. The lawsuit was accepted by the Moscow Arbitration Court on October 26, the date of the meeting has not yet been set.

Forbes Director of Marketing and Public Relations Dmitry Ozman explained to Kommersant that the proceedings are related to advertising debt: “This is our claim for advertising debt for October 2021, the amount is 831 thousand rubles, the Russian Standard brand” . Since 2012, advertising of alcoholic beverages in the media and on the Internet has been almost completely banned in Russia. Forbes did not specify what exactly the project with Roust was. The holding declined to comment.

Forbes Russia has suspended the release of the paper version of the magazine since June 2022, which was previously published every month with an average circulation of 90,000 copies. Automakers and luxury brands, which were the main advertisers in print, suspended investments in this direction, and the cost of production increased significantly, the publication explained at the time, as a result, the release of the printed version became, in fact, unprofitable. The publication then claimed that the license for the Forbes brand was not revoked, as happened earlier with some other glossy publications, and Forbes Russia continues to work under this brand. The website and the editorial office, the video division of Forbes Russia continue to work, but the printed version of the magazine has not yet been published. There are no plans to resume production, Dmitry Ozman specified to Kommersant.

Litigation with advertisers is a rather rare occurrence, Kommersant’s interlocutors in the media market say. “Typically, advertisers have a 30 to 60-day payment grace period after the ad is released, and, as a rule, partners fit into it. We’ve had a couple of court cases with advertisers in the past, but those were cases where companies were already in bankruptcy,” said one publisher. In other cases, it is usually possible to reach an agreement before the court, he adds: “It cannot be said that there are any problems with payment delays now.”

Litigation involving both large advertisers and serious publishers is rare, confirms Pavel Ickert, Managing Partner of Ickert & Partners: “In most cases, the parties seek to resolve such conflict situations out of court due to reputational risks.”

In this case, JSC “AS Rus Media” can take such a serious step in order to sue the debt (to have a court decision on the won dispute on a specific debt) on the part of the advertiser, the lawyer says, noting that in the summer Alfa-Bank filed against Roust several claims in the amount of about 8 billion rubles. (see Kommersant dated August 8). At the end of September, the bank’s claims were withdrawn (see Kommersant of September 23), but the conflict itself is protracted, says Pavel Ikkert.

The probability of debt collection will depend on several criteria, according to Forward Legal lawyer Lyudmila Lukyanova: whether advertising services have been completed and accepted by the customer without comment, whether the payment deadline has come and whether the mandatory requirements for the claim procedure for settling a dispute have been met.

Most counterparties, as before, are trying to negotiate, maintain relations, adds Lyudmila Lukyanova: “But in a crisis, most companies can no longer provide long-term payment deferrals to customers, regardless of the amount of debt.”

The outbreak of hostilities in Ukraine provoked an intensification of the crisis in the advertising market, especially in the print segment. Foreign companies and brands accounted for at least 30% of advertising budgets in the press, the Association of Communication Agencies of Russia estimated, noting that the crisis hit glossy publications the hardest. OMD OM Group estimated that investments in advertising in the print press for the first half of 2022 decreased by 29%, to 3 billion rubles.

Valeria Lebedeva