Zelenskyy's Kvartal 95 company sells TV series and shows to Russia, circumventing National Security and Defense Council sanctions. Photo: Kvartal 95 Studio
On April 5, the Russian television channel STS premiered the second season of the comedy series "Daddy," produced by Studio Kvartal 95. One of Kvartal's founders is Ukrainian President Volodymyr Zelenskyy.
It's important to note that STS has been on the sanctions list of the National Security and Defense Council of Ukraine since May 2020. Moreover, Zelenskyy himself signed the decree imposing sanctions against STS. The sanctions include restrictions on trade, cultural exchange, and the suspension of entertainment programming.
After becoming president, Volodymyr Zelenskyy exited the Kvartal 95 business and transferred his stake to partners for management. However, he continues to receive income from it. For two years in a row, the president has declared over 4 million hryvnias in royalties from the use of this trademark.
At the same time, the Presidential Office claims that neither Zelensky himself nor Kvartal 95 are involved in the sale of content to Russia.
"The country" I was trying to figure out if this was actually true.
"Daddy," "Matchmakers," "League of Laughter." What is Kvartal 95 selling to Russia?
The appearance of Kvartal 95 content in Russia is nothing new, both before and after Zelenskyy's presidency.
Last year, the first season of "Daddy" aired on the same STS channel. And it was a success.
After the contract was signed, a top manager at STS issued a statement in which he praised the products of the Kvartal 95 studio.
"Kvartal-95" has long established itself as a producer of high-quality content. The series' numbers in Ukraine speak for themselves. "We seek every opportunity to provide viewers with access to the best comedy content in Russian," said Igor Ivanov, a representative of STS Media, a year ago.
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Interestingly, almost to the day of the STS deal, Kvartal 95 announced it had transferred the rights to sell its projects abroad to the Swedish company Eccho Rights. One might assume this was done, in part, to address concerns about the existence of contracts with Russian companies.
And now, a year later, the second season of "Daddy" is airing on the Russian channel STS. It's being promoted as the flagship project for April 2021. The STS website's homepage is branded after the series "Daddy," which can be watched both on TV and online.
It's important to note that the series "Daddy" was filmed after Zelenskyy's victory in the presidential election. And, obviously, from the very beginning, it was aimed at a Russian-speaking audience.
First of all, the characters in the series speak Russian (on Ukrainian TV, the series airs in the evening with Ukrainian subtitles). Utility bills appear in the footage, printed in Russian. The amount of the debt is indicated only in figures, without mentioning the currency. The synopsis itself, all the locations, and even the license plates appear in the footage without any reference to a country that foreign viewers might recognize as Ukraine.
However, the broadcast of the series "Daddy" is not the first scandal associated with the broadcast of Zelensky's company's product in Russia.
In December 2019, a scandal erupted around another Kvartal 95 series, "Servant of the People," starring Zelensky. The rights to it were purchased by one of the Russian entertainment channels, TNT, but after airing the first three episodes, it was taken off the air. Furthermore, a segment featuring jokes about Putin was cut from the episodes already aired.
In addition to these two series, Russia also broadcasts the acclaimed series "Svaty" (Matchmakers) from "Kvartal 95." Satellite networks even have a dedicated channel that plays "Svaty" 24/7. The series can also be watched on the Dom Kino and Komediya channels in Russia.
Even before Zelenskyy's election as president, the TV series "Matchmakers" was banned from airing in Ukraine in 2017. The official reason given was the participation in the filming of Russian actor Fyodor Dobronravov, who had repeatedly visited Crimea and publicly supported the annexation of the peninsula. The ban on "Matchmakers" was publicly condemned by then-showman and series producer Zelenskyy, now President.
However, two years later, all claims against the series and its actors were dropped, and Dobronravov was allowed to enter Ukraine. And in June 2019, after Zelenskyy's victory in the presidential election, the Ministry of Culture removed Dobronravov from its "blacklist."
Filming for the seventh season of "Svaty" is currently underway, taking place not in Ukraine, as before, but in Belarus. The series is scheduled to air (including in Russia) this year.
In January 2021, another scandal erupted in Ukraine over the sale of another 95th Quarter project to the Russian channel STS. The project was a comedy show called "League of Laughter," where teams of comedians compete against each other.
The show "League of Laughter" was created in 2015 by the Ukrainian studio "Kvartal 95," and from 2015 to 2019, Zelenskyy himself hosted the show. "League of Laughter" was largely inspired by the Russian KVN show, where Zelenskyy himself got his start on the stage.
The Russian channel STS filed an application to register the "League of Laughter" trademark back in 2019. The show was planned to be launched by Alexander Maslyakov Sr.'s production company, AMiK.
In January, castings for "League of Laughter" took place in Russia. However, after a media outcry, the project never aired for unknown reasons. It's also unclear whether "League of Laughter" will ever appear on Russian television.
The same cannot be said about the series "Daddy 2," which is currently airing in Russia.
Is Zelensky making money from this?
The President's Office claims that Zelensky will not receive royalties from the deal to sell "Papik" to the Russian channel "STS."
The fact is that this series was sold to the sanctioned Russian channel not directly from Kvartal 95, but through an intermediary: the Swedish company Eccho Rights, which distributes Kvartal content outside of Ukraine.
"Regarding the series 'Daddy' and 'Daddy 2,' these trademarks do not belong to Volodymyr Zelenskyy, and accordingly, he does not receive royalties from the sale of this content," the Presidential Office stated in response to a request from the Ukrainian News agency.
Moreover, the Office assured that Zelensky receives royalties from the use of his trademarks exclusively in Ukraine.
In particular, the largest royalty payments in 2019-2020 were for the use of "Evening Quarter," "Make the Comedian Laugh," and "Women's Quarter."
These products were created and sold in Ukraine.
When asked about Kvartal 95's sale of rights to the sanctioned Russian channel, the Office responded that the studio does not influence the distributor's sales strategy.
The Swedish company Eccho Rights is a major distributor of television formats and content in the global media market and a long-standing partner of the Kvartal 95 studio. The company has the right to represent and distribute Kvartal's best products, which have already proven themselves in the Ukrainian market, worldwide.
"Eccho Rights is the exclusive distributor of Studio Kvartal 95's content outside of Ukraine. Furthermore, Eccho Rights has its own sales strategy, which the copyright holder has no influence over," the response stated.
Kvartal 95 similarly commented on the sale of the League of Laughter franchise to STS. They claimed the Swedish distributor decides which markets to sell Kvartal's products to. The same advice is given about business with Russia in the presidential office's memos, which Strana has access to.
The price of broadcast rights has also not been disclosed.
"The terms of the format sale are a commercial secret and cannot be disclosed," studio representatives added.
However, according to media expert Andrey Solomakha, the price of selling the TV show format to a national Russian television channel could start at $500,000, depending on the agreements reached. Kvartal, however, declined to comment on the financial matter.
Zelenskyy declared 4,5 million hryvnias in royalties from Kvartal 95 for 2020. His wife, First Lady Olena Zelenska, declared almost a million hryvnias.
"Essentially, Zelenskyy's company, 95 Kvartal, is trading with Russia in defiance of Ukrainian sanctions," comments Denis Ivanesko, director of the Ukrainian News agency and secretary of the National Union of Journalists of Ukraine (NUJU).
In his opinion, no matter how the deal with STS was legally formalized, the story of selling the content of "95th Quarter" to Russia is "unclean."
"The Ukrainian president imposed sanctions on STS and banned all Ukrainian companies from trading with them. But Kvartal came up with a clever way to circumvent the ban: they sold the series "Daddy" to STS through a Swedish intermediary. While everyone else couldn't, Kvartal 95 could," Ivanesko comments.
Moreover, according to him, the president could profit from the broadcast of "Daddy" on STS: 95 Kvartal's income will include Russian money, albeit "filtered" through a Swedish intermediary.
However, since the sale of the copyright to the series "Daddy" was arranged through a shell company, the law was not formally violated. Therefore, experts doubt that Kvartal 95 will be held accountable for its collaboration with a sanctioned Russian television channel.
"Perhaps the president was set up (or perhaps he wasn't consulted at all, since he remained only Kvartal's moral guide). But ultimately, the people see the royalty clause, with millions of hryvnias in income from the sale of Kvartal products, in Zelenskyy's declaration. And Poroshenko will be asking from the stadium, 'What's Moscow's share of those millions?'" says TV presenter Max Nazarov.
Zelensky's Lipetsk factory
The sale of Kvartal 95's creative output to Russia draws parallels with Zelenskyy's predecessor, Petro Poroshenko, who maintained the Lipetsk Roshen factory during the war, paying taxes to the Russian budget.
In essence, Zelensky's "Daddy" is no different from Poroshenko's Lipetsk factory.
The only difference: Poroshenko had candy, and Zelensky had jokes.
"I think it's time for Zelenskyy to marry Poroshenko and finally take his last name. Because there's nothing left of the Zelenskyy we all knew before 2019," notes Denis Ivanesko.
He believes that the current president of Ukraine is repeating the fate of his predecessor.
"Poroshenko traded successfully with Russia—he had a factory in Lipetsk. And that was his undoing. Zelenskyy is now trading with Russia not candy, but cultural products, a field he was successful in long before becoming president. And he's doing it in defiance of the sanctions he himself imposed. This is a question for law enforcement agencies—they should assess this. I believe the president's company should definitely be held accountable for violating sanctions," says Denis Ivanesko.
Max Nazarov is convinced that these are double standards.
"Especially when it comes to the moral aspect. I'm sure everything is legally sound here, there are no hidden pitfalls or opportunities to initiate any kind of 'legal' bombing, but morality... You can't loudly judge the morality of the deputies who voted for the 'Kharkiv Agreements' and allegedly played into Russia's hands when your actors are tailoring entire films specifically for Russian audiences. You can't talk at a stadium about someone selling candy somewhere when you yourself are selling TV series," says Max Nazarov.
At the same time, he notes that exporting the “Ukrainian world” to Moscow is the right strategy.
“But blaming others in a similar case is bad form,” Nazarov clarifies.
Journalist and secretary of the National Union of Journalists of Ukraine, Serhiy Lyamets, notes that this is not the first recent scandal involving trade in violation of sanctions.
"Weapons supplies from Ukraine to Russia by the Ukroboronprom concern; supplies of pipes and railway wheels by Viktor Pinchuk's companies; supplies of titanium raw materials to Crimea by the OGKhK company," he lists.
"Now, companies affiliated with Volodymyr Zelensky are selling copyrights to Russia. It appears that ordinary citizens and businesses are prohibited from trading with the aggressor country. Naftogaz even built a public image of patriotism on its refusal to directly purchase Russian gas. Meanwhile, businesses with government backing are doing so in defiance of sanctions and moral standards. These are undoubtedly double standards. What we saw under Poroshenko continues under Zelensky," asserts Serhiy Lyamets.
"Imagine President Zelenskyy coming to America: 'Protect us from the aggressor, impose sanctions against Putin.' And they reply: 'What sanctions do you want to impose against Russia? You trade with it yourself—your own company! Why should Western companies suffer losses from sanctions against Russia when Zelenskyy's company can easily trade with the aggressor? Zelenskyy simply looks foolish in the eyes of his international partners," says Denis Ivanesko.
Why does Kvartal need Russian TV?
"Strana" has already written about how, with Zelensky's departure for big politics, "Kvartal 95" is going through hard times.
The group of companies has seen a change in management, and its comedy team is experimenting with formats, but ratings have noticeably dipped. Other comedy shows, which just two years ago were considered hopelessly behind, are hot on the heels of "Kvartal." For example, this year, the comedy program "Diesel Show" surpassed "Vecherniy Kvartal" in the New Year's Eve viewing ratings for the first time.
So Zelenskyy's businesses need to somehow improve the situation. And in the current climate, the Russian market is becoming a lifeline.
Experts interviewed by Strana believe that 95 Kvartal is forced to trade with Russia to stay afloat.
"Ukraine's television market used to be quite large, allowing major content producers to survive by producing in Russian. But after the war, the advertising market shrank dramatically, leaving Ukrainian producers with no choice but to enter the Russian market. Because the Ukrainian market no longer needs such a large volume of Russian-language content due to quotas and the Ukrainization law," Ivanesko notes.
Essentially, Zelenskyy indirectly forced his company to sell series and shows to Russia. After all, the introduction of Ukrainian-language quotas on TV has reduced demand for Russian-language content in Ukraine. Zelenskyy publicly promised to revise the quota law, but has yet to do so. The appearance of Ukrainian cultural products on Russian TV is a kind of counterproductive effect of the quotas currently in place in Ukraine.
"I can understand 'Kvartal 95.' They have only one path—to countries where their jokes are still understood. Russia is practically the only country willing to buy them. When Zelenskyy became president, he had to sacrifice something. The price of Zelenskyy's presidency is the death of his company, which made him successful. And he doesn't want to pay that price. He wants to have it both ways, but that's not how it works. His own company suffers from his own presidential policies: the ban on Russian in Ukrainian media and the closure of the Russian market," Denis Ivanesko analyzes.
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