The recent news about MirCorp’s financial woes is a sign that Wall Street does not consider zero-gravity space ventures a zero-sum game, industry experts say.
"The problem with new space ventures is that they have at least two hurdles to jump," said Ray Williamson, a research professor at the Space Policy Institute. "Where do you get capital and how do you convince investors that a space venture is a viable business economically, or that it will be in the future?"
The Russian government, which owns Mir, stopped financially supporting the station last year but has leased commercial rights to
Amsterdam-based MirCorp.
MirCorp has been scrambling to raise money to save the station to make money from commercial ventures on the aging space lab. Executives of the company, which has spent more than $40 million this year to keep Mir alive, said the battle is not over.
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| The Russian space station Mir over Earth in 1997.
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| MirCorp is hoping that advertising will generate dollars. Pictured here is the MirCorp logo placed on the outside of a the station -- a typical advertising opportunity created by a computer-oriented image. Click to Enlarge.
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"Mircorp has drawn a line in the sand and said 'this is how things were done before, and this is the way they are going to be done from now on.' "
"The victory of MirCorp is far from dead," said company spokesman Jeffery Lenorovitz.
He said that one of MirCorp's major investors, Chirinjeev Kathuria, spent time last week in New York feeling out the market
for the company’s initial public offering.
"I have been talking to investment banks and lawyers and everyone is interested," said Kathuria. "Both the IPO and the plan to bring a strategic partner in are both on track."
Kathuria said that both he and telecommunications entrepreneur Walt Anderson have decided to invest another $12 million into the project. "We will announce it in the next three to four weeks," he said.
Despite Kathuria’s optimism, some experts still believe that coming up with
the kind of money that Mir needs won't be an easy task.
"The market for investment in projects involving long durations in space is just not there yet," said Frank DiBello, managing director at
space venture-capital firm SpaceVest.
The station, first launched in 1986, needs to be kicked up into a higher orbit as a result of drag from the thinner upper atmosphere -- an expensive project to undertake.
Late last week, Russia earmarked funds for two supply rockets to Mir, but left the fate of the nearly 15-year-old outpost undecided, Russian officials said.
The remote-controlled
Progress ships will carry fuel to Mir, which could be used to boost the massive station into a higher orbit and extend its life, or to lower it into the atmosphere for a destructive controlled reentry into the Pacific Ocean.
The Cabinet allocated $27 million to pay for the two cargo ships, but put off a decision about Mir's fate until February, Deputy Prime Minister Ilya Klebanov said.
Lenorovitz said MirCorp Chief Executive Jeffery Manber is in Russia meeting with officials to explain its financial plans to keep Mir in orbit.
MirCorp’s Manber, who wrote
a letter to Russian President Vladimir Putin stating Mir’s case, may have his work cut out for him.
In the letter, published in the Russian newspaper Kommensant, Manber appealed to the Russian leader's sense of national pride, warning that Russia's participation in the International Space Station (ISS) would not guarantee that the struggling nation's scientific and economic interests would be protected.
Manber hoped MirCorp and Putin would "jointly find the way to keep the Mir space station in orbit," reminding the president that earlier this year the he had stated his firm intentions to save the almost 15-year-old outpost.
However communications between the company and Russian space officials has been static at best since the venture was first hatched earlier this year and the letter was coolly received by the Russian Space Agency, Rosaviakosmos.
Reports of the space outpost’s future have been upbeat on this side of the Atlantic, with MirCorp spokesmen exuding confidence that Mir’s business plan will remain viable.
"We are a real company and we have real revenue," Lenorovitz said.
Other reports, however, have indicated a darker outlook for the station. This cacophony of voices has ranged from NASA sources to
Russian officials pointing to February as the likely window for Mir's fiery return to Earth.
Russian Deputy Prime Minister Ilya Klebanov said this month that members of the government had recommended that the station be left to forces of gravity.
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Russian Aviation and Space Agency spokesman Sergey Gorbunov last week went as far as to deny that
investment tycoon Dennis Tito, who reportedly paid about $20 million to be the first space tourist, has trained for the trip to Mir at Russia’s Star City.
"There were no official documentation substantiating his training," he said.
MirCorp’s Lenorovitz shot back after hearing Gorbunov’s claim.
"We’ve got pictures!" he told SPACE.com. "We had 40-some journalists who attended the press conference in Space City announcing Tito’s training."
One industry insider said that this breakdown in communication is common when it comes to doing business with the Russians.
"Fyodor Tyutchev, a 19th-century philosopher said it best," the industry official said. "Russia cannot be understood with the mind, it can only be believed in."
In fact, a survey this year by Boston-based Marttila Communications Group found that 69 percent of Russians polled think the West wants their economy to collapse. Eighty-seven percent believe the United States is taking advantage of Russia's current weakness to expand its global influence.
Only 13 percent regarded the U.S. as a friend or ally; 28 percent described it as an enemy.
Despite the swirl of bad news for the beleaguered space station, MirCorp officials argue that it is worth saving because blue-chip advertisers can be lured into the final frontier.
Within the past couple of years, the station has scored a few notable deals. Pepsi-Cola shelled out $1.5 million for the honor of having cosmonauts open a can of Pepsi in space before an international TV audience.
And
Pizza Hut slapped its logo on the side of a rocket bound for Mir to the tune of $1.2 million.
"When you are at the cutting-edge of things, it’s not an ideal world," Lenorovitz said. "MirCorp has drawn a line in the sand and said ‘this is how things were done before, and this is the way they are going to be done from now on.’ "
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