About
About
Peter Gerwe is an American media entrepreneur with a global footprint. His career started out of college as VP Production of Unuson, producer of the US Festivals which were financed by Apple computers co-founder Steve Wozniak. Since the US Festivals (which included artists David Bowie, The Police, Talking Heads, The Clash, U2 and Fleetwood Mac), his focus has been on building and selling media companies. He founded and built multiple companies in Russia including television network CTC Media ($2.3 billion NASDAQ listed IPO, $4.0 billion at maximum market cap), Radio Maximum, one of Moscow’s first FM radio stations, HELLO! Magazine, Russia’s first and market-leading celebrity magazine, IMHO, Russia’s first and market-leading internet advertising agency and Corvette Telecom, one of Moscow’s leading independent Ethernet broadband internet companies.
Peter Gerwe: The key thing about it, which was interesting, was that you could start things from scratch, that you could build, and you could do things. And there weren't a lot of ideas because in the '90s, people, the Russians didn't really understand it yet. It was just breaking up. And Russians are really, really careful about what they already own. If this is a Coke bottle, and I'm not going to sell it for less than 10 or whatever, because it's the only one I got, and I'm probably not going to get another one, and I'm going to make sure that I take care of it. On the other side, is they have this whole thing in the psyche about everything that was already made is for Russians, and the people using it are allowed to use it in a sense, you know? And exploit it and do it, but it's really all blocks of the state. They want to take something back or they want to do something. So, the key was just starting stuff from scratch and building.
Daniel Satinsky: From scratch, right. And so, when did you first go there?
Peter Gerwe: My first trip was in '83. No, '84.
Daniel Satinsky: '84. Okay. In what capacity?
Peter Gerwe: Well, I graduated from college. I went to work for Steve Wozniak, Apple computers, and we did these big music festivals in California.
Daniel Satinsky: The US Festival, yeah.
Peter Gerwe: US festivals were the first really ever with the Russians, what they call the Space Bridges...
Daniel Satinsky: You know Evelyn Messenger? I spoke with her.
Peter Gerwe: Evelyn and Kim [Spencer] produced it for me. I was the guy who had of production and started all that. They had done it before on a smaller scale, but we did it on a larger scale. I went with Jim [Hickman], and to this day, remained a big fan of his, and that led to a whole bunch of stuff. We just kept going. And then around the late '80s when things were starting to open up, I could see the split happening between the Ministry of Communications and Gosteleradio*. So, Gosteleradio was the TV guys. They didn't have the frequencies or the transmitters, it was all with the Ministry of Communications. The Ministry of Communications didn't like Gosteleradio guys because they were doing all the work, and they were making all the programming. I started bonding with all these Ministry of Communications guys, tower operators, all that kind of stuff, and said, "Let's build our own." And that's how we operated.
Daniel Satinsky: How did you become aware of this split?
Peter Gerwe: I was working on those Space Bridges because the Space Bridges were a big deal. They were a really big deal to the Russians. In fact, when I first landed in Moscow, and this, I think it was in '83 or '84, I get off the plane and I was 23 years old, long hair, surf California, all this kind of stuff. And there were three guys at the Jetway saying, "Where's Vice President Gerwe?" That's who I was and everything. And so, it was a big deal to them. So, when it went out on prime-time Channel One, and it was Steve Wozniak and it was Apple computers, it was all that, and they could tape it and control it. It was very good propaganda for them. That led to the Donahue-Pozner debates, all that stuff.
Daniel Satinsky: So, were you part of that as well? Part of the Space Bridge for Donahue-Pozner?
Peter Gerwe: I actually didn't produce them. It was Pozner and Donahue, but Pozner got started on Space Bridges. Hickman found him in Russian radio. And he was very articulate and very smart, and he said, "Hey, look, we need this guy on television." That started Pozner's television career.
Daniel Satinsky: Really? Fantastic. And did you have any particular interest in Russia, or is this just happenstance?
Peter Gerwe: Californian and I'm still Californian...
Daniel Satinsky: California world peace.
Peter Gerwe: I'm still an 18-year-old Californian. I haven't changed. With Hickman, we started doing all this kind of selling films for rubles into all these ruble exchanges, how to convert rubles. It was a lot of wild stuff between '84 and '90. And then '90, when Perestroika and all this kind of stuff started opening up. I said, "Let's do a radio station." We started the first, there are two radio stations that started on Western FM. 88-106. Because it didn't exist then. There were sounds...
Daniel Satinsky: No FM.
Peter Gerwe: 62 to 73 megahertz. Which no Western receiver could receive. They designed it that way, we called it “Stalin’s FM”. And so, our station called Radio Maximum and Europa Plus, French radio station ours launched. This is a true story too. So, ours launched on December 25th, 1991.
Daniel Satinsky: Oh, the day Gorbachev resigned.
Peter Gerwe: December 25th, 1991. We decided we'd start a week early and play all Beatles music. No station ID, no anything, just all Beatles music. And started with, “All You Need is Love” and all that kind of stuff. Moscow News, “Moskovskiye Novosti” was our partner. So, I spent a year negotiating this agreement, and we go on the air and the chief editor, Yakovlev), who you never really saw, who was this super huge big boss, comes running in an hour later and says, "The Soviet Union just broke up." I thought he was kidding. "I'm going to go on radio." And that's it. "Wait a second. We have no news. No news. No news." I don't care what..." "No news. No news." So, we negotiated this kind of terse two sentence thing and put it on the air every hour.
Daniel Satinsky: Just an announcement? "Your country is no longer in..."
Peter Gerwe: No, it was just a very simple statement and fact, "Today, Boris, Yeltsin and blah, blah, blah, blah, blah signed a protocol." No, nothing good or bad. "In Ukraine… blah, blah" that's two sentences.
Daniel Satinsky: Oh, wow.
Peter Gerwe: That's how we framed it.
Daniel Satinsky: And that was interspersed with Beatles songs.
Peter Gerwe: It's at the top of the hour.
So, it went for a week. And then, on December 31st on New Year's Eve, which is a big deal to the Russians, we launched the radio station, Radio Maximum launched officially.
Daniel Satinsky: How did you launch? How'd you make Russians aware that there was this new way of...
Peter Gerwe: Word of mouth was the best advertising. It was just fantastic. You know, Western FM? We didn't need any advertising at all. Everyone knew about it right away. And it was like, who was cool and had the receivers that could receive 88-106? Because they were making them, they had the dual bands. For a year or two, the manufacturers, it was easier for them just to put a 62 to 73 megahertz bandwidth on an existing radio that they already had. So, it's kind of a bolt on. So, a lot of people had the 88-106, but there was just nothing there. So, all of a sudden you have Madonna and the Beatles and everything. It took off like a rocket.
Daniel Satinsky: Wow, yeah. Well, the Beatles were already super popular in Russia anyway, so you just…. How did you produce it? Did you use Russians or were you sitting there as a DJ or what's going on?
Peter Gerwe: When that actually started, it was owned by myself, 18-year-old Californian, a company called Westwood One Radio Networks, Westwood One. That's the biggest radio software programming company in the world. Billion-dollar, Nasdaq listed, biggest programming company. And Harris Corporation, which is the biggest producer of transmitters in the world.
So, I went to these guys and said, "Hey, I can get radio licenses and let's build radio stations in Russia. Let's build one in every city. Our own stations and everything." And they go, "Okay, great." And actually, the funny thing is, the Westwood One guy said, "No, no, no, we will do it ourselves." So, he gets on his plane, flies to Moscow, takes his wife, Mary Turner is the name, who is a famous radio personality. They stay at the most expensive hotel, and she goes to take a bath and turns on the bath, and it comes out yellow. She freaks out, completely loses it. And they went to the first few meetings, and I had a few questions. They were saying, "What's a radio and how does this work?" They had no idea.
So, they got on his jet that afternoon, flew back and called me from the plane and said, "We'll go do your deal. No problem." We had this little guy and this huge radio company. They had Casey's Top 40, and they had all the big stuff, radio stuff, and they gave us an expert, a guy named Bert Kleinman, who really built and did all the work and Harris started shipping transmitters.
Daniel Satinsky: So, you were new market for Harris?
Peter Gerwe: Our Ministry of Communications guys did get a brand-new Harris transmitter. It was like a Rolls Royce rolling into their showroom. So now I'm friends with all of them. They're calling me, "Hey, I want one of those." Yeah, it's kind of how it started.
Daniel Satinsky: How many stations did you end up with?
Peter Gerwe: We launched Radio Maximum in '92. Actually, it started the end of '91. And six months later, I get called into a meeting. I had a lot of meetings in the Ministry of Communications where they would not give you their names or their cards, a lot of guys sat there, and they didn't say anything. You ask them a question; they just wouldn't say anything. There one guy ran the meeting. So, I'm in this meeting, one of those meetings about two or three a year, and this guy sitting down there goes, "Hey, I'm from St. Petersburg, and I have the first 24-hour private television stations licensed in the country." They had, the first one was, I forgot, 2x2 actually, I think is what it was called, on Moscow, which was...
Daniel Satinsky: I remember a station called that, yeah.
Peter Gerwe: It wasn't a station. It was a six-hour block. And there was another one, I forgot what it was called, I think it was 2x2. But this guy had a 24-hour frequency Channel Seven. I said, "Sure." I had no idea what we're doing with television. These guys were saying, "Oh that radio's small, TV's the way to go." So, we built a TV station there. It was the most painful experience I ever had. I'm American, so we know ABC, CBS, CBS. They own those stations in the big cities, and they launch them. Then they connect them all by affiliate agreements. You're familiar with that, right?
Daniel Satinsky: Yeah.
Peter Gerwe: I figured, well, the best way to do this...
Daniel Satinsky: By the way, my wife was a DJ on WBCN in Boston, so I know a little about this stuff.
Peter Gerwe: Okay. So, we built this TV station in St. Petersburg, over a year or two, go see all his buddies in the other big cities, Nizhny [Novgorod], Ufa, Yekaterinburg. And we built stations there. And then we came to Moscow and bought a station or a license on UHF, which nobody could see. So, they gave us the license. They figured, "Oh, they'll sit out there." So we go into Moscow Cable, and we paid Moscow Cable $5 million. We lent them $5 million. They never paid us back. We lent them $5 million, and they rewired the whole city. The whole city for $5 million. I mean, it was $5 million. I mean... They just put it in their plan and kept the 5 million.
Daniel Satinsky: Whoa. And you were a small company sort of jumping around, or were you growing? Did you become a big company?
Peter Gerwe: We were growing faster. Literally 10 years went by. It was just a blur now.
Daniel Satinsky: It sounds like it. Did you know any Russian at the time while you were doing this?
Peter Gerwe: I still don't speak very good Russian. Yeah. I know, "Are you single?", "I want my steak medium rare" and "Let's go home now."
Daniel Satinsky: The key phrases.
Peter Gerwe: What I actually did was I actually tried to hire really smart, talented Soviets, Russians. Look, just go work the deal. And when you have a question, come back to me. This is what we want. Here's our strategy.
We're going to go to Vladimir's [Unspecified TV entrepreneur] buddies and say, "Look, we'll give you a Harris transmitter. We'll help you hook it up. We'll send technicians. You'll have the most beautiful..." the guys are salivating. "You got to get the frequency, and you got to put it into the company, and it's got to be nice and clean," and la, la, la, la, la, that kind of stuff. And so, they got the drill. I sat there most of the time. I was completely silent. I had meetings where I didn't say anything except "Hello. How are you doing? This is wonderful."
Daniel Satinsky: How'd you find these smart Russians?
Peter Gerwe: Well, there's really only three things in life, I think. Right? Your strategy, what you're doing, what you're trying to do, people, and then what's the third? I just lost my mind. So, strategy...
Daniel Satinsky: It's not money, huh?
Peter Gerwe: Everything else follows, really. To me, it's always about people and team building. And there was a time when six of the eight television networks in Russia were run by people that worked for me, that I hired from Mars candy bars, from... And so, I was just a cheerleader, really.
What you really try to do is troubleshoot. You start figuring out: they’re going to try to steal. They're not going to say where the problems are. And so, you spend a lot of time troubleshooting, trying to figure out where the problem is. What's weird here?
Daniel Satinsky: And when you say that weird on your side or on your partner's side, or both?
Peter Gerwe: Both. Mostly on the Russian side. I lived in Moscow, so it was mostly on the Russian side. The American was not so weird because it's pretty simple. They either understood it or they not. They either supported it, or they didn't. America was not so weird. Only the stories like Norm Patis which I think is the funniest thing in the world. Hickman told you this story about Billy Joel coming to Bully Billy Joel tour? So, Christie Brinkley comes too. They sent a semi of Evian water. So, they take Evian and pour it into the bathtub. Can you think about that?
Daniel Satinsky: They poured into the bathtub?
Peter Gerwe: Yeah.
Daniel Satinsky: Holy shit. Wow.
Peter Gerwe: Of course, I get tasked with doing this, right? And I'm standing next to her, and she goes, "Hey, look, I'm not a princess, and I'm not trying to be difficult, but I can't put my skin in that. I make 10 million a year on, in there. I can't do that." So, they go in there and they scrub it, and they clean it, and they wash it and this, and they pour Evian to take a bath. It made me happy.
Daniel Satinsky: It makes an impression.
Peter Gerwe: To finish this story, we did radio and then got totally distracted with television, and we built in St. Petersburg, and then eight stations around Moscow. We came to Moscow, paid the cable guys. So, it took them a year to fix, to rewire the whole city. So, we had perfect reception all of a sudden. And we really didn't turn it on for a year. We were testing and we were testing it. And then we launched CTC network, and we'd figured that we'd have maybe 100 stations, 50 stations by the end of the year under affiliate agreements. By the end of the first year, we had 300 stations and 85% penetration of Russia. Because everybody had their own stations, and all the Ministry guys were grabbing networks. Everybody was grabbing networks and building all this kind of stuff, but they didn't have any programming.
Daniel Satinsky: From scratch, right. And so, when did you first go there?
Peter Gerwe: My first trip was in '83. No, '84.
Daniel Satinsky: '84. Okay. In what capacity?
Peter Gerwe: Well, I graduated from college. I went to work for Steve Wozniak, Apple computers, and we did these big music festivals in California.
Daniel Satinsky: The US Festival, yeah.
Peter Gerwe: US festivals were the first really ever with the Russians, what they call the Space Bridges...
Daniel Satinsky: You know Evelyn Messenger? I spoke with her.
Peter Gerwe: Evelyn and Kim [Spencer] produced it for me. I was the guy who had of production and started all that. They had done it before on a smaller scale, but we did it on a larger scale. I went with Jim [Hickman], and to this day, remained a big fan of his, and that led to a whole bunch of stuff. We just kept going. And then around the late '80s when things were starting to open up, I could see the split happening between the Ministry of Communications and Gosteleradio*. So, Gosteleradio was the TV guys. They didn't have the frequencies or the transmitters, it was all with the Ministry of Communications. The Ministry of Communications didn't like Gosteleradio guys because they were doing all the work, and they were making all the programming. I started bonding with all these Ministry of Communications guys, tower operators, all that kind of stuff, and said, "Let's build our own." And that's how we operated.
Daniel Satinsky: How did you become aware of this split?
Peter Gerwe: I was working on those Space Bridges because the Space Bridges were a big deal. They were a really big deal to the Russians. In fact, when I first landed in Moscow, and this, I think it was in '83 or '84, I get off the plane and I was 23 years old, long hair, surf California, all this kind of stuff. And there were three guys at the Jetway saying, "Where's Vice President Gerwe?" That's who I was and everything. And so, it was a big deal to them. So, when it went out on prime-time Channel One, and it was Steve Wozniak and it was Apple computers, it was all that, and they could tape it and control it. It was very good propaganda for them. That led to the Donahue-Pozner debates, all that stuff.
Daniel Satinsky: So, were you part of that as well? Part of the Space Bridge for Donahue-Pozner?
Peter Gerwe: I actually didn't produce them. It was Pozner and Donahue, but Pozner got started on Space Bridges. Hickman found him in Russian radio. And he was very articulate and very smart, and he said, "Hey, look, we need this guy on television." That started Pozner's television career.
Daniel Satinsky: Really? Fantastic. And did you have any particular interest in Russia, or is this just happenstance?
Peter Gerwe: Californian and I'm still Californian...
Daniel Satinsky: California world peace.
Peter Gerwe: I'm still an 18-year-old Californian. I haven't changed. With Hickman, we started doing all this kind of selling films for rubles into all these ruble exchanges, how to convert rubles. It was a lot of wild stuff between '84 and '90. And then '90, when Perestroika and all this kind of stuff started opening up. I said, "Let's do a radio station." We started the first, there are two radio stations that started on Western FM. 88-106. Because it didn't exist then. There were sounds...
Daniel Satinsky: No FM.
Peter Gerwe: 62 to 73 megahertz. Which no Western receiver could receive. They designed it that way, we called it “Stalin’s FM”. And so, our station called Radio Maximum and Europa Plus, French radio station ours launched. This is a true story too. So, ours launched on December 25th, 1991.
Daniel Satinsky: Oh, the day Gorbachev resigned.
Peter Gerwe: December 25th, 1991. We decided we'd start a week early and play all Beatles music. No station ID, no anything, just all Beatles music. And started with, “All You Need is Love” and all that kind of stuff. Moscow News, “Moskovskiye Novosti” was our partner. So, I spent a year negotiating this agreement, and we go on the air and the chief editor, Yakovlev), who you never really saw, who was this super huge big boss, comes running in an hour later and says, "The Soviet Union just broke up." I thought he was kidding. "I'm going to go on radio." And that's it. "Wait a second. We have no news. No news. No news." I don't care what..." "No news. No news." So, we negotiated this kind of terse two sentence thing and put it on the air every hour.
Daniel Satinsky: Just an announcement? "Your country is no longer in..."
Peter Gerwe: No, it was just a very simple statement and fact, "Today, Boris, Yeltsin and blah, blah, blah, blah, blah signed a protocol." No, nothing good or bad. "In Ukraine… blah, blah" that's two sentences.
Daniel Satinsky: Oh, wow.
Peter Gerwe: That's how we framed it.
Daniel Satinsky: And that was interspersed with Beatles songs.
Peter Gerwe: It's at the top of the hour.
So, it went for a week. And then, on December 31st on New Year's Eve, which is a big deal to the Russians, we launched the radio station, Radio Maximum launched officially.
Daniel Satinsky: How did you launch? How'd you make Russians aware that there was this new way of...
Peter Gerwe: Word of mouth was the best advertising. It was just fantastic. You know, Western FM? We didn't need any advertising at all. Everyone knew about it right away. And it was like, who was cool and had the receivers that could receive 88-106? Because they were making them, they had the dual bands. For a year or two, the manufacturers, it was easier for them just to put a 62 to 73 megahertz bandwidth on an existing radio that they already had. So, it's kind of a bolt on. So, a lot of people had the 88-106, but there was just nothing there. So, all of a sudden you have Madonna and the Beatles and everything. It took off like a rocket.
Daniel Satinsky: Wow, yeah. Well, the Beatles were already super popular in Russia anyway, so you just…. How did you produce it? Did you use Russians or were you sitting there as a DJ or what's going on?
Peter Gerwe: When that actually started, it was owned by myself, 18-year-old Californian, a company called Westwood One Radio Networks, Westwood One. That's the biggest radio software programming company in the world. Billion-dollar, Nasdaq listed, biggest programming company. And Harris Corporation, which is the biggest producer of transmitters in the world.
So, I went to these guys and said, "Hey, I can get radio licenses and let's build radio stations in Russia. Let's build one in every city. Our own stations and everything." And they go, "Okay, great." And actually, the funny thing is, the Westwood One guy said, "No, no, no, we will do it ourselves." So, he gets on his plane, flies to Moscow, takes his wife, Mary Turner is the name, who is a famous radio personality. They stay at the most expensive hotel, and she goes to take a bath and turns on the bath, and it comes out yellow. She freaks out, completely loses it. And they went to the first few meetings, and I had a few questions. They were saying, "What's a radio and how does this work?" They had no idea.
So, they got on his jet that afternoon, flew back and called me from the plane and said, "We'll go do your deal. No problem." We had this little guy and this huge radio company. They had Casey's Top 40, and they had all the big stuff, radio stuff, and they gave us an expert, a guy named Bert Kleinman, who really built and did all the work and Harris started shipping transmitters.
Daniel Satinsky: So, you were new market for Harris?
Peter Gerwe: Our Ministry of Communications guys did get a brand-new Harris transmitter. It was like a Rolls Royce rolling into their showroom. So now I'm friends with all of them. They're calling me, "Hey, I want one of those." Yeah, it's kind of how it started.
Daniel Satinsky: How many stations did you end up with?
Peter Gerwe: We launched Radio Maximum in '92. Actually, it started the end of '91. And six months later, I get called into a meeting. I had a lot of meetings in the Ministry of Communications where they would not give you their names or their cards, a lot of guys sat there, and they didn't say anything. You ask them a question; they just wouldn't say anything. There one guy ran the meeting. So, I'm in this meeting, one of those meetings about two or three a year, and this guy sitting down there goes, "Hey, I'm from St. Petersburg, and I have the first 24-hour private television stations licensed in the country." They had, the first one was, I forgot, 2x2 actually, I think is what it was called, on Moscow, which was...
Daniel Satinsky: I remember a station called that, yeah.
Peter Gerwe: It wasn't a station. It was a six-hour block. And there was another one, I forgot what it was called, I think it was 2x2. But this guy had a 24-hour frequency Channel Seven. I said, "Sure." I had no idea what we're doing with television. These guys were saying, "Oh that radio's small, TV's the way to go." So, we built a TV station there. It was the most painful experience I ever had. I'm American, so we know ABC, CBS, CBS. They own those stations in the big cities, and they launch them. Then they connect them all by affiliate agreements. You're familiar with that, right?
Daniel Satinsky: Yeah.
Peter Gerwe: I figured, well, the best way to do this...
Daniel Satinsky: By the way, my wife was a DJ on WBCN in Boston, so I know a little about this stuff.
Peter Gerwe: Okay. So, we built this TV station in St. Petersburg, over a year or two, go see all his buddies in the other big cities, Nizhny [Novgorod], Ufa, Yekaterinburg. And we built stations there. And then we came to Moscow and bought a station or a license on UHF, which nobody could see. So, they gave us the license. They figured, "Oh, they'll sit out there." So we go into Moscow Cable, and we paid Moscow Cable $5 million. We lent them $5 million. They never paid us back. We lent them $5 million, and they rewired the whole city. The whole city for $5 million. I mean, it was $5 million. I mean... They just put it in their plan and kept the 5 million.
Daniel Satinsky: Whoa. And you were a small company sort of jumping around, or were you growing? Did you become a big company?
Peter Gerwe: We were growing faster. Literally 10 years went by. It was just a blur now.
Daniel Satinsky: It sounds like it. Did you know any Russian at the time while you were doing this?
Peter Gerwe: I still don't speak very good Russian. Yeah. I know, "Are you single?", "I want my steak medium rare" and "Let's go home now."
Daniel Satinsky: The key phrases.
Peter Gerwe: What I actually did was I actually tried to hire really smart, talented Soviets, Russians. Look, just go work the deal. And when you have a question, come back to me. This is what we want. Here's our strategy.
We're going to go to Vladimir's [Unspecified TV entrepreneur] buddies and say, "Look, we'll give you a Harris transmitter. We'll help you hook it up. We'll send technicians. You'll have the most beautiful..." the guys are salivating. "You got to get the frequency, and you got to put it into the company, and it's got to be nice and clean," and la, la, la, la, la, that kind of stuff. And so, they got the drill. I sat there most of the time. I was completely silent. I had meetings where I didn't say anything except "Hello. How are you doing? This is wonderful."
Daniel Satinsky: How'd you find these smart Russians?
Peter Gerwe: Well, there's really only three things in life, I think. Right? Your strategy, what you're doing, what you're trying to do, people, and then what's the third? I just lost my mind. So, strategy...
Daniel Satinsky: It's not money, huh?
Peter Gerwe: Everything else follows, really. To me, it's always about people and team building. And there was a time when six of the eight television networks in Russia were run by people that worked for me, that I hired from Mars candy bars, from... And so, I was just a cheerleader, really.
What you really try to do is troubleshoot. You start figuring out: they’re going to try to steal. They're not going to say where the problems are. And so, you spend a lot of time troubleshooting, trying to figure out where the problem is. What's weird here?
Daniel Satinsky: And when you say that weird on your side or on your partner's side, or both?
Peter Gerwe: Both. Mostly on the Russian side. I lived in Moscow, so it was mostly on the Russian side. The American was not so weird because it's pretty simple. They either understood it or they not. They either supported it, or they didn't. America was not so weird. Only the stories like Norm Patis which I think is the funniest thing in the world. Hickman told you this story about Billy Joel coming to Bully Billy Joel tour? So, Christie Brinkley comes too. They sent a semi of Evian water. So, they take Evian and pour it into the bathtub. Can you think about that?
Daniel Satinsky: They poured into the bathtub?
Peter Gerwe: Yeah.
Daniel Satinsky: Holy shit. Wow.
Peter Gerwe: Of course, I get tasked with doing this, right? And I'm standing next to her, and she goes, "Hey, look, I'm not a princess, and I'm not trying to be difficult, but I can't put my skin in that. I make 10 million a year on, in there. I can't do that." So, they go in there and they scrub it, and they clean it, and they wash it and this, and they pour Evian to take a bath. It made me happy.
Daniel Satinsky: It makes an impression.
Peter Gerwe: To finish this story, we did radio and then got totally distracted with television, and we built in St. Petersburg, and then eight stations around Moscow. We came to Moscow, paid the cable guys. So, it took them a year to fix, to rewire the whole city. So, we had perfect reception all of a sudden. And we really didn't turn it on for a year. We were testing and we were testing it. And then we launched CTC network, and we'd figured that we'd have maybe 100 stations, 50 stations by the end of the year under affiliate agreements. By the end of the first year, we had 300 stations and 85% penetration of Russia. Because everybody had their own stations, and all the Ministry guys were grabbing networks. Everybody was grabbing networks and building all this kind of stuff, but they didn't have any programming.
Daniel Satinsky: So, you were the source of programming for them?
Peter Gerwe: We were the source of programming. It was all government approved, and it was just entertainment that didn't have any news. So, we had better penetration than half the TV networks that had all the coverage and all the press was ever, nobody ever talked about us. And we were just perfectly happy with that, unless it was... So, we did a movie every night at 9:00, very simple programming, all this kind of stuff.
Daniel Satinsky: Where did you get the programming? Did you get old Soviet stuff, or did you get American stuff?
Peter Gerwe: No, all Western. As much as we could afford, which was not a lot.
Daniel Satinsky: So, did you have Dallas? Were you the ones that put Dallas on TV?
Peter Gerwe: I think we might've done Dallas. Yeah. I don't know. We didn't do the soaps. Those were on state television.
Daniel Satinsky: The Mexican stuff.
Peter Gerwe: Santa Barbara, stuff like that. I don't think Dallas was ours, actually. We had Hill Street Blues. Hill Street Blues was our first one.
Daniel Satinsky: Wow. That must've made a big impression on Russians.
Peter Gerwe: Yeah, it was pretty interesting. But the movie was a big thing. And then, we started producing local Russian series, and those were really big. That's what really made the company actually.
Daniel Satinsky: I see. Were those crime series ones, St. Petersburg crime series?
Peter Gerwe: There's one called “Bednaya Nastia”*. And there was one called, I forgot the name. “Bednaya Nastia” was the first kind of real Russian produced, youth, cool, edgy, what's her name? No, I can't remember. It's about the girl and I can't remember it. And then the 1998 crisis hit. So, we cut the staff from 1,000 to 200 and then kept at this 200 level, and the market came back and our profits just went up. We just kept a low overhead, and then we went public on Nasdaq, $2.3 billion. It went up to four.
Daniel Satinsky: Whoa. When did you go public? What year?
Peter Gerwe: 2016.
Daniel Satinsky: 2016. It was a big year for you?
Peter Gerwe: No, it was 2010.
Daniel Satinsky: Okay. After you lived through not only the 1998 crisis, but the 2008, 2009 crisis as well?
Peter Gerwe: Yeah. They were nasty. I remember I was there when the White House was being attacked. I was there when they defaulted on the loans. June 1, 2006. Geez, I might be wrong. June 1, 2006.
Daniel Satinsky: Okay. So, what were you, a California or a New York company? What kind of company were you?
Peter Gerwe: Delaware.
Daniel Satinsky: Delaware Company. Okay. And did you have to get special permissions or oversight in Russia or nothing?
Peter Gerwe: No. I was there from the early Space Bridges, so they kind of were okay with me.
Daniel Satinsky: So, all this whole period where all the wars were going on over control media, you were on the side, right? You weren't paying attention?
Peter Gerwe: Better penetration and putting more movies on.
Daniel Satinsky: I mean, I remember there's fights with Gusinsky and all these oligarchs.
Peter Gerwe: Yeah. We had our problems with Gusinsky. What fight? You mean with the government?
Daniel Satinsky: With the government. I mean, because these guys who owned the media outlets, as I understand it, saw them as an avenue of political influence, which would allow them to have economic opportunities.
Peter Gerwe: You're absolutely right. Primarily Gusinsky and Berezovsky got their stuff sent out.
Daniel Satinsky: And you saw yourself as purely entertainment.
Peter Gerwe: I went to the Kremlin once a year and said, "Thank you very much. Everything's fine. No, we're not doing any news, and we're not going to into any politics. Can I give you a ticket to our opening of this TV series that's coming up? And thank you very much."
Daniel Satinsky: That lasted through a whole lot of political change.
Peter Gerwe: Yeah. I remember the one that probably hurt the most, was the one when they defaulted on the debt, and the ruble tanked?
Daniel Satinsky: Right. In '98.
Peter Gerwe: So, we guys, we were very close to our team. I remember the mid-level guys had worked for me for years and had saved over two or three years, like 50,000 or 60,000, the ruble equivalent of half their salary for several years and it just became worthless overnight.
Daniel Satinsky: God, that was tragic.
Peter Gerwe: Yeah. Those guys were living with their wife, their new marriage, and they're living with their grandmother and their father and all of that kind of stuff. So, we really wanted to get them out into apartments and stuff like that. I spent a lot of time; we had one of our British guy got killed in a gay hate crime. We had one of our head of advertising sales husband was shot at Gosteleradio when they were fighting at Gosteleradio. We convinced the Dutch ambassador to send a medevac plane because he was shot, and the Russians weren't doing a very good job with fixing him. And so, they sent a plane and it was a lot of weird stuff.
Daniel Satinsky: Was that '93 when that happened?
Peter Gerwe: Yeah, it was when they stormed the White House, there was a big fight there shooting out at the Gosteleradio. He was a reporter. He popped the camera up and said they were giving a report and then somebody shot him.
Daniel Satinsky: And he survived?
Peter Gerwe: He did.
Daniel Satinsky: Did you ever have gangsters lean on you? Did you have to have “krysha”*?
Peter Gerwe: Pardon me?
Daniel Satinsky: Did you have gangsters lean on you, or did you have to have krysha for that?
Peter Gerwe: I get asked that question a lot,
Daniel Satinsky: Sorry, I have to ask. It's not that I want to ask.
Peter Gerwe: No, no. I'm a 6'6" personally. We always had these very close friends. We never had any “krysha”. We never paid any bribes. The only thing we insisted is that they had their shares in our joint venture. So, if you call that a bribe, you call that a bribe. To me, it's just building a good business. That was the key to us. And we operate under licenses. We had state licenses, we had TV licenses, so we never really had any problems.
The problem was that when we got, all of a sudden, we're like the third biggest network in the country, and it's owned by Americans and me. So, I had all these means with people like Gusinsky saying, "Oh, you're so smart, but you should give it to us now because I'll take it now," kind of thing. And we ended up doing a deal with the Alfa Group, [Mikhail] Fridman, which was a business arrangement. They bought 25% of the network. They didn't want to own more, because they wanted to say they had a minority stake and they couldn't force it, but they wanted to have, and they were the best partners, just the best. Fridman and [Petr] Aven. They were just best. And so, Fridman invested $10 million and sold it 10 years later for $1.1 billion. So, they liked the deal. They liked us.
Daniel Satinsky: I guess they did.
Peter Gerwe: But we always did deals with people and partnerships and built them intelligently. There was a period of time though, when we were a little too big. I was a little worried.
Daniel Satinsky: Well, when did Alfa get in?
Peter Gerwe: About that time. Our strategy was always, because if you go to a Russian partner and you don't have much, they take everything. So, our strategy was always build as much as you can, get as far as you can, and then bring a partner in. At least you're in a position of strength. And you have something they want, and you don't have to do a deal with them. And I did have some conversations. There were some guys that I knew in the licensing division, one in particular, very honorable man. And we talked about this. Because he's saying, "Look, I can't keep giving you license because you're an American owned company. I mean, this is not right." So, we did the whole strategy together and implemented it, and Alfa was just great. I mean, I cannot tell you how of good of a partner they were.
Daniel Satinsky: What does that mean to you? They were a good partner.
Peter Gerwe: They did everything they said. They kept all the funny business away from it, never had to deal with it. They provided good advice. It was a business deal. It wasn't about, it wasn't about “krysha” or, "Oh, you this… that kind of stuff." Now, if we would've, I maintain that all this stuff is really pretty understandable. I mean, once you're there.
I was in media, but even I knew that at that point, that the state had decided that all natural minerals and resources go to Russians. They went out over a period of about a year or two and made offers to buy everybody out at fair prices. They were gentlemanly fair prices, I think, but I know a little bit. And people that got greedy deserve it, deserves not the right way to say it all, but they...
Daniel Satinsky: It was predictable.
Peter Gerwe: They created a lot of their own problems that they shouldn’t have. And then the people like Berezovsky and Gusinsky, they're just playing a bigger game, and they lost that part of the game. But when Putin came to power, there's some great pictures. There’re some great pictures of the oligarchs at that time. They're lined up in front of him. They had these very famous meetings when he just came to power, and Fridman was there, and I talked to him about it, and I knew some of the other ones that were there. And we talked about it because they were all interested in media, and they always called me up and blah, blah, blah. And I was always really good friends with Pozner, who was always really close to these guys.
They basically said that Putin just said, "Guys, this is very, very simple. You have your stuff. Okay, I'm not going to get in your business and you don't get in my business. And my business is politics and government and running this country. So, we have a very, very clear, simple understanding. So, if you get in my business, think of what it's going to be like if somebody attacked your business, what you would do. And you guys are all a little bit more rougher than I am," I think is the way that he said it too. That's the way the conversation went. I actually believe that's what happened. Now, what happened at that point is you start shifting the power then. So, a new contract to do this or this or this or this didn't go to the existing oligarchs. They lost their influence on new stuff, but they kept what they had generally.
Daniel Satinsky: Was going public about getting out, or is the company, Storytime, still heavily involved in Russia?
Peter Gerwe: No, completely out.
Daniel Satinsky: Completely out. Okay.
Peter Gerwe: My kids’ trust owns some stuff there. They own some TV networks with Sony, actually. But I'm completely out. I still have a house there. We still go. My wife is Russian and still spend summers, and we always go New Year's and stuff like that, but I'm completely out. I mean, you’ve got to decide, either you're become a lifer and do it all the time or get out. I was never really a Russian guy, and I was never really into the language. I'm an entrepreneur, so I'm on to building other things.
Daniel Satinsky: Well, who owns those 300 whatever those stations that you had?
Peter Gerwe: Well, it is all wrapped up into a TV network called CTC Media. CTC Media, you can just Google it and read about it and Radio Maximum. So, they exist. They're still the same. They have new owners. It's another story about media, I could tell you. But at one point, it all consolidated. There’re four groups. There's ORT, there's RTR, there's Gazprom Media, and there's National Media Group that control everything that's not the state. And that's it. You can't, there's nothing else that can be in the media. And they're being very careful about controlling cable, and they're getting very much organized. So, it's those four groups. There's nothing really in media anymore. There is maybe digital internet if I really was rushing one to live there. And there's some cool stuff there, but otherwise.
Daniel Satinsky: And the people who work for you spread out across this media landscape? I mean, are you the godfather of this industry, if you will?
Peter Gerwe: I wouldn't say I'm the godfather of the industry. I'm the guy that built the networks. There's TNT, there's several of them now that are like that. They gradually then take over more and more of their stations because Russians don't like contracts. They like to control.
Daniel Satinsky: All along, you expected this would happen at some point, right? That you would build something of value, you'd sell it and get out. You weren't there to...
Peter Gerwe: No, and I did multiple deals. I did radio, we did television, we did cable, we did magazines, Hello Magazine. And I built magazine group, publishing a book deal. So, I like to build things. I've built 11 companies in 35 years and sold successfully seven of them.
Peter Gerwe: We were the source of programming. It was all government approved, and it was just entertainment that didn't have any news. So, we had better penetration than half the TV networks that had all the coverage and all the press was ever, nobody ever talked about us. And we were just perfectly happy with that, unless it was... So, we did a movie every night at 9:00, very simple programming, all this kind of stuff.
Daniel Satinsky: Where did you get the programming? Did you get old Soviet stuff, or did you get American stuff?
Peter Gerwe: No, all Western. As much as we could afford, which was not a lot.
Daniel Satinsky: So, did you have Dallas? Were you the ones that put Dallas on TV?
Peter Gerwe: I think we might've done Dallas. Yeah. I don't know. We didn't do the soaps. Those were on state television.
Daniel Satinsky: The Mexican stuff.
Peter Gerwe: Santa Barbara, stuff like that. I don't think Dallas was ours, actually. We had Hill Street Blues. Hill Street Blues was our first one.
Daniel Satinsky: Wow. That must've made a big impression on Russians.
Peter Gerwe: Yeah, it was pretty interesting. But the movie was a big thing. And then, we started producing local Russian series, and those were really big. That's what really made the company actually.
Daniel Satinsky: I see. Were those crime series ones, St. Petersburg crime series?
Peter Gerwe: There's one called “Bednaya Nastia”*. And there was one called, I forgot the name. “Bednaya Nastia” was the first kind of real Russian produced, youth, cool, edgy, what's her name? No, I can't remember. It's about the girl and I can't remember it. And then the 1998 crisis hit. So, we cut the staff from 1,000 to 200 and then kept at this 200 level, and the market came back and our profits just went up. We just kept a low overhead, and then we went public on Nasdaq, $2.3 billion. It went up to four.
Daniel Satinsky: Whoa. When did you go public? What year?
Peter Gerwe: 2016.
Daniel Satinsky: 2016. It was a big year for you?
Peter Gerwe: No, it was 2010.
Daniel Satinsky: Okay. After you lived through not only the 1998 crisis, but the 2008, 2009 crisis as well?
Peter Gerwe: Yeah. They were nasty. I remember I was there when the White House was being attacked. I was there when they defaulted on the loans. June 1, 2006. Geez, I might be wrong. June 1, 2006.
Daniel Satinsky: Okay. So, what were you, a California or a New York company? What kind of company were you?
Peter Gerwe: Delaware.
Daniel Satinsky: Delaware Company. Okay. And did you have to get special permissions or oversight in Russia or nothing?
Peter Gerwe: No. I was there from the early Space Bridges, so they kind of were okay with me.
Daniel Satinsky: So, all this whole period where all the wars were going on over control media, you were on the side, right? You weren't paying attention?
Peter Gerwe: Better penetration and putting more movies on.
Daniel Satinsky: I mean, I remember there's fights with Gusinsky and all these oligarchs.
Peter Gerwe: Yeah. We had our problems with Gusinsky. What fight? You mean with the government?
Daniel Satinsky: With the government. I mean, because these guys who owned the media outlets, as I understand it, saw them as an avenue of political influence, which would allow them to have economic opportunities.
Peter Gerwe: You're absolutely right. Primarily Gusinsky and Berezovsky got their stuff sent out.
Daniel Satinsky: And you saw yourself as purely entertainment.
Peter Gerwe: I went to the Kremlin once a year and said, "Thank you very much. Everything's fine. No, we're not doing any news, and we're not going to into any politics. Can I give you a ticket to our opening of this TV series that's coming up? And thank you very much."
Daniel Satinsky: That lasted through a whole lot of political change.
Peter Gerwe: Yeah. I remember the one that probably hurt the most, was the one when they defaulted on the debt, and the ruble tanked?
Daniel Satinsky: Right. In '98.
Peter Gerwe: So, we guys, we were very close to our team. I remember the mid-level guys had worked for me for years and had saved over two or three years, like 50,000 or 60,000, the ruble equivalent of half their salary for several years and it just became worthless overnight.
Daniel Satinsky: God, that was tragic.
Peter Gerwe: Yeah. Those guys were living with their wife, their new marriage, and they're living with their grandmother and their father and all of that kind of stuff. So, we really wanted to get them out into apartments and stuff like that. I spent a lot of time; we had one of our British guy got killed in a gay hate crime. We had one of our head of advertising sales husband was shot at Gosteleradio when they were fighting at Gosteleradio. We convinced the Dutch ambassador to send a medevac plane because he was shot, and the Russians weren't doing a very good job with fixing him. And so, they sent a plane and it was a lot of weird stuff.
Daniel Satinsky: Was that '93 when that happened?
Peter Gerwe: Yeah, it was when they stormed the White House, there was a big fight there shooting out at the Gosteleradio. He was a reporter. He popped the camera up and said they were giving a report and then somebody shot him.
Daniel Satinsky: And he survived?
Peter Gerwe: He did.
Daniel Satinsky: Did you ever have gangsters lean on you? Did you have to have “krysha”*?
Peter Gerwe: Pardon me?
Daniel Satinsky: Did you have gangsters lean on you, or did you have to have krysha for that?
Peter Gerwe: I get asked that question a lot,
Daniel Satinsky: Sorry, I have to ask. It's not that I want to ask.
Peter Gerwe: No, no. I'm a 6'6" personally. We always had these very close friends. We never had any “krysha”. We never paid any bribes. The only thing we insisted is that they had their shares in our joint venture. So, if you call that a bribe, you call that a bribe. To me, it's just building a good business. That was the key to us. And we operate under licenses. We had state licenses, we had TV licenses, so we never really had any problems.
The problem was that when we got, all of a sudden, we're like the third biggest network in the country, and it's owned by Americans and me. So, I had all these means with people like Gusinsky saying, "Oh, you're so smart, but you should give it to us now because I'll take it now," kind of thing. And we ended up doing a deal with the Alfa Group, [Mikhail] Fridman, which was a business arrangement. They bought 25% of the network. They didn't want to own more, because they wanted to say they had a minority stake and they couldn't force it, but they wanted to have, and they were the best partners, just the best. Fridman and [Petr] Aven. They were just best. And so, Fridman invested $10 million and sold it 10 years later for $1.1 billion. So, they liked the deal. They liked us.
Daniel Satinsky: I guess they did.
Peter Gerwe: But we always did deals with people and partnerships and built them intelligently. There was a period of time though, when we were a little too big. I was a little worried.
Daniel Satinsky: Well, when did Alfa get in?
Peter Gerwe: About that time. Our strategy was always, because if you go to a Russian partner and you don't have much, they take everything. So, our strategy was always build as much as you can, get as far as you can, and then bring a partner in. At least you're in a position of strength. And you have something they want, and you don't have to do a deal with them. And I did have some conversations. There were some guys that I knew in the licensing division, one in particular, very honorable man. And we talked about this. Because he's saying, "Look, I can't keep giving you license because you're an American owned company. I mean, this is not right." So, we did the whole strategy together and implemented it, and Alfa was just great. I mean, I cannot tell you how of good of a partner they were.
Daniel Satinsky: What does that mean to you? They were a good partner.
Peter Gerwe: They did everything they said. They kept all the funny business away from it, never had to deal with it. They provided good advice. It was a business deal. It wasn't about, it wasn't about “krysha” or, "Oh, you this… that kind of stuff." Now, if we would've, I maintain that all this stuff is really pretty understandable. I mean, once you're there.
I was in media, but even I knew that at that point, that the state had decided that all natural minerals and resources go to Russians. They went out over a period of about a year or two and made offers to buy everybody out at fair prices. They were gentlemanly fair prices, I think, but I know a little bit. And people that got greedy deserve it, deserves not the right way to say it all, but they...
Daniel Satinsky: It was predictable.
Peter Gerwe: They created a lot of their own problems that they shouldn’t have. And then the people like Berezovsky and Gusinsky, they're just playing a bigger game, and they lost that part of the game. But when Putin came to power, there's some great pictures. There’re some great pictures of the oligarchs at that time. They're lined up in front of him. They had these very famous meetings when he just came to power, and Fridman was there, and I talked to him about it, and I knew some of the other ones that were there. And we talked about it because they were all interested in media, and they always called me up and blah, blah, blah. And I was always really good friends with Pozner, who was always really close to these guys.
They basically said that Putin just said, "Guys, this is very, very simple. You have your stuff. Okay, I'm not going to get in your business and you don't get in my business. And my business is politics and government and running this country. So, we have a very, very clear, simple understanding. So, if you get in my business, think of what it's going to be like if somebody attacked your business, what you would do. And you guys are all a little bit more rougher than I am," I think is the way that he said it too. That's the way the conversation went. I actually believe that's what happened. Now, what happened at that point is you start shifting the power then. So, a new contract to do this or this or this or this didn't go to the existing oligarchs. They lost their influence on new stuff, but they kept what they had generally.
Daniel Satinsky: Was going public about getting out, or is the company, Storytime, still heavily involved in Russia?
Peter Gerwe: No, completely out.
Daniel Satinsky: Completely out. Okay.
Peter Gerwe: My kids’ trust owns some stuff there. They own some TV networks with Sony, actually. But I'm completely out. I still have a house there. We still go. My wife is Russian and still spend summers, and we always go New Year's and stuff like that, but I'm completely out. I mean, you’ve got to decide, either you're become a lifer and do it all the time or get out. I was never really a Russian guy, and I was never really into the language. I'm an entrepreneur, so I'm on to building other things.
Daniel Satinsky: Well, who owns those 300 whatever those stations that you had?
Peter Gerwe: Well, it is all wrapped up into a TV network called CTC Media. CTC Media, you can just Google it and read about it and Radio Maximum. So, they exist. They're still the same. They have new owners. It's another story about media, I could tell you. But at one point, it all consolidated. There’re four groups. There's ORT, there's RTR, there's Gazprom Media, and there's National Media Group that control everything that's not the state. And that's it. You can't, there's nothing else that can be in the media. And they're being very careful about controlling cable, and they're getting very much organized. So, it's those four groups. There's nothing really in media anymore. There is maybe digital internet if I really was rushing one to live there. And there's some cool stuff there, but otherwise.
Daniel Satinsky: And the people who work for you spread out across this media landscape? I mean, are you the godfather of this industry, if you will?
Peter Gerwe: I wouldn't say I'm the godfather of the industry. I'm the guy that built the networks. There's TNT, there's several of them now that are like that. They gradually then take over more and more of their stations because Russians don't like contracts. They like to control.
Daniel Satinsky: All along, you expected this would happen at some point, right? That you would build something of value, you'd sell it and get out. You weren't there to...
Peter Gerwe: No, and I did multiple deals. I did radio, we did television, we did cable, we did magazines, Hello Magazine. And I built magazine group, publishing a book deal. So, I like to build things. I've built 11 companies in 35 years and sold successfully seven of them.
State Committee of Television and Radio Broadcasting of the Soviet Union
Poor Nastya
The roof, Criminal protection
