TV exec works to undo effects of Communism

by Melissa Wilson

SBJ Staff

In the midst of the political, social and economic upheaval facing those living in the heart of the former Soviet Union, Tim McDonald is trying to entertain.

Since 1997, McDonald, a 1960 graduate of Parkview High School, has been living and working in Russia as the chief operating officer and general director of INTH Ltd., owner of TV3 Russia Television Network, which includes stations in Moscow and St. Petersburg.

McDonald spoke to Downtown Rotary Club members Dec. 29 at Kentwood Hall about his experiences as an American businessman in Russia.

"We actually have a lot of movies on the air; we're an entertainment network, which is actually different in Russia, because most Russian television is news, current affairs, political analysis and talk shows," McDonald said.

McDonald said the market for the programming his stations provide was wide open in Russia, not only because Russian television consisted mainly of news, but because of the poor production value of shows shot on videotape.

"Everything they do, they do in the studio; it's all studio productions. Here, when we turn on the TV we see 'Friends,' 'Home Improvement' and all these shows shot on film. You don't see that production value there," McDonald said.

The reason for this, McDonald said, is the television and film industries in Russia are entirely separate and independent of each other.

"There are two very distinct industries. There's television, and they work on videotape or live; and there's the film industry, and they work on film. If you were a director in the film industry, you would never work in television and vice versa," McDonald said. "Of course they're all trained that way because they were never allowed to interchange before," he added.

McDonald related the story of a Soviet stage actress who made the mistake of appearing in a movie in the early '50s. "It was the only movie she ever appeared in, and she won the best actress award in Cannes (France) that year. For that, she was not allowed to work in theater again. This woman would've been a star, but now she's a 60-year-old pensioner with one memory."

Norman Lear, of "All in the Family" and other '70s TV show fame, is one of the investors in the TV3 Network. McDonald said revenues generated from local advertising have brought in about $750,000 so far.

"I know ($750,000) doesn't sound like much, but you have to remember that in Russia, there's no such thing as local advertising, so every time we sell a contract, we bring someone on television for the first time and teach them to advertise," McDonald said.

His initial plan when he was considering the TV3 venture was to build television stations and to develop a local market because programming costs and personnel costs in Russia are very low.

"If you can break a station even with a million-and-a-half a year in revenues and be self-sustaining until the country starts to perk up, then you've done something," he said.

McDonald said a conservative business plan is what kept TV3 alive through August, when he said 90 percent of the Russian economy disappeared.

"We didn't spend millions of dollars in order to create a big network facility that then needed $100 million in revenue to support itself," McDonald said. "We created a good television station in St. Petersburg; a good one in Moscow. We've 11 other licenses to go and we have a lot of money in the bank. All of our assets are cash, in the bank, in New York."

McDonald said there's a possibility his company will buy two networks in Poland and merge them.

"This is very much a time of consolidation, when times get hard like this. It might make sense to work in other Eastern European countries, keep the Russian assets, but potentially have something going in a country that's a little less economically backward, which is what Russia is right now."

McDonald, who is divorced and has two sons who also work in television, said Russia is a fascinating country to live in, and that he's used to the cold.

"Summers are delightful, just beautiful. I don't think there's a more beautiful city in Europe than St. Petersburg in the summer," he said.

McDonald lived in Moscow the first year he was in Russia, and now he has an apartment in St. Petersburg, although he travels to the United States constantly for business and still owns a home in Springfield.

Managing Russian workplace attitudes has proven to be another challenge for McDonald.

"It's not like the young generation is a non-Soviet generation, and it's not that they believed in that either.

"They were not ideological Communists, they were not subscribers to the Communist economic theory. They were people who lived in that regime," McDonald said.

"As a result, my people are surprised when I point out to them that their ability to keep their job depends on how they do their job; they literally don't make that connection. If I were to fire a person, they would be shocked and say 'Why was I fired? I've been here every day, I'm never late.' They have no concept of service because the only way you lost a job under the old regime was if you made an enemy."

McDonald said the Communist regime bred a patronage system in the workplace. To advance in a company, an entry-level employee would make friends with a superior, who would then become a mentor and take care of the new employee in the company.

"The whole infrastructure that the Communists left behind is still running the country; they didn't go back to ground zero and build it back up again," McDonald said.

McDonald said beginning a television network in Russia intrigued him because he saw Russia as the last frontier for major league broadcasting.

"There are 150 million people in Russia, all of whom have a TV set because it was mandated by the Soviet government to use as a propaganda tool. It's an interesting place to compete," McDonald said.

McDonald founded the TVX Broadcast Group in 1979 which grew to be the largest independent station group in the United States, reaching 15 percent of U.S. households.

He said the success of TVX is what pushed him to pursue the TV3 Network project in Russia.

"We started (TVX) with $5,000 and a construction permit for one station. Nine years later, we sold the company to Paramount Pictures for $315 million. Once you've done something like that, and made a little money so you don't have to worry about eating, you find it hard to go back to work for the sake of working," McDonald said.

McDonald began his career as a replacement copywriter at KY3 in the summer of 1959.

He also worked at local radio stations and joined the staff of Neds and Wardlow Advertising before moving to San Francisco in 1969 to continue his broadcast career.

McDonald worked in promotion and programming positions in major cities around the country for 10 years before founding the TVX network in Norfolk, Va.

After TVX sold to Paramount Pictures, McDonald moved back to Springfield in 1992 and started The Alliance Press, a publishing company that acquired Country Heart Magazine and began All Roads Lead to Branson, as well as two other publications. The Alliance Press sold earlier this year to Grant Publications Group after McDonald moved to Russia.

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