MirCorp
From Wikipedia, the free encyclopedia
MirCorp was a commercial space company created in 1999 by space entrepreneurs and involving the Russian space program that successfully undertook a number of firsts in the business of space exploration by utilizing the aging Russian space station Mir as a commercial platform. Its actions were highly controversial and angered many as it created a roadblock to the planned International Space Station in creating a viable, low cost alternative.
The company achieved the following:
- First commercial lease agreement for orbiting manned space station (December, 1999)
- First privately funded manned expedition to a space station (launch April 4, 2000, return 16 June, 2000)
- First privately funded cargo resupply mission in space (April 27, 2000)
- First privately funded spacewalk (May 12, 2000)
- First contract for space tourist (Dennis Tito, June 19, 2000)
In terms of business development, the company was able to launch the era of space tourism by signing American businessman Dennis Tito to his launch contract. It also signed with television producer Mark Burnett (producer of the Survivor reality show) and with NBC, to produce a reality show “Destination Mir,” where the winner would travel to space. And it also was able to sign other media, entertainment and commercial space research projects. MirCorp’s CEO Jeffrey Manber later stated “ we failed to survive but proved the business model, and in the long-term that we be just as important.”
The company came to an end for a variety of reasons. It seems to have been a combination of the financial backers inability to continue funding the venture and pressure by NASA to de-orbit the station. NASA viewed the station as a threat to their own plans for the International Space Station. The station existed until 23 March 2001, at which point it was deliberately de-orbited, breaking apart over the Pacific Ocean.
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[edit] Background:
The company was formed as an idea by telecommunications and space investor Walt Anderson and space advocate Rick Tumlinson. Russia lacked the funds to upgrade and save the space station, and had concluded it had no choice but to deorbit the station. Several ideas were floated, some absurd and some interesting, including one to hand over the Mir to the United Nations. The idea proposed by Anderson and Tumlinson was to save the Mir space station by raising it to a higher orbit to gain time and developing a “space tether” to supply power to keep the space station in orbit while further funds were raised. This plan was never implemented by the MirCorp team, as the United States government barred the export of the space tether technology until after the deorbit of the space station was announced. It was just one of many obstacles placed in front of the venture by the American government.
The founders recruited well known space entrepreneur Jeffrey Manber, who had helped negotiate the first contract between the Soviet Union and NASA on space interests, and had also represented the huge Russian space company RSC Energia in its American dealings during the 1990’s. Manber created the business model for the venture which involved proving that space could be a platform for media and entertainment, as well as serious space research.
In February, 2000, the agreement between the Russian space company RSC Energia, which had the commercial rights to the space station, and MirCorp, was announced in London. Present at the press conference was MirCorp CEO Jeffrey Manber and RSC Energia General Director Yuri P. Semenov. Also present at the press conference was co-investor Dr. Cherinjeev Kathuria, and Andrew Eddy, recruited from the Canadian Space Agency.
The news took senior NASA officials by surprise, and thus began the roller-coaster ride of the MirCorp efforts. Their efforts were criticized by many as a private interference with international space policies. Their desire to sell ticket to space as part of a “citizen explorers” program was ridiculed by NASA and its supporters.
Yet, as a result of the company’s backing, the RSC Energia officials boosted the Mir into a higher orbit, thus postponing the deorbit that had been agreed to by the Russian Space Agency in discussions with NASA. Manber later explained that the business model for the venture was modeled after that of air travel, where Boeing may build the planes but commercial agents such as United or British Airways sells the tickets. The intent was to have marketing experts sell the space program, and let the space manufacturer, RSC Energia, focus on the safe operations of the station. Manber explained that in the aviation world it was not the manufacturers who sold the tickets, it was the marketing companies. MirCorp and RSC Energia were the first to use this strategy for space exploration, which has emerged again more recently with Sir Richard Branson’s announcement to market Scaled Composites StarShip suborbital flights.
It was also unusual as an international venture with Russia in the 1990’s in that the Russians were given the operating control of the venture, reflecting the political realities of the importance of the Mir to the Russian society. RSC Energia owned 60% of MirCorp, whereas the financial investors controlled 40%. Investor Anderson explained that he was comfortable letting the Russians run the space component, and his team would run the business. “A lot of this venture is based on trust, pure and simple.” Anderson explained. Anderson was not so sanguine regarding NASA and used the media interest in the venture to launch many critical comments towards NASA, the planned International Space Station and even the foreign policies of the American government. This could not have but solidified opposition to the venture inside the Administration. Indeed, Anderson selected Holland as the headquarters for the company since he believed the country was far more ethical than that of his own.
Regardless of the controversy, a new era in space exploration was inaugurated on April 4, 2000, when the Soyuz TM-30, known as the MirCorp mission carried two crew members, Sergei Zalyotin and Alexandr Kaleri, to the shut Mir space station.
The two man crew returned the dormant Mir space station to life, located the source of the leak, repaired the leak, and carried on a number of commercial and basic research. Zalyotin admitted to being nervous when the hatch door was opened, not sure what exactly would be found in the station. While the mission was being undertaken, the management of MirCorp was able to announce a number of commercial contracts, including that of the agreement with NBC and Mark Burnett. NBC even began running commercials promoting its upcoming “Destination Mir” reality show.
On June 16th, on schedule, the mission came to an end. It had lasted 73 days and the crew returned in good health. Behind the scenes, the MirCorp management and Energia space officials were both surprised at the technical and commercial success, but worried that the Mir would soon have to be shut for good. On June 19th, 2000, a press conference was held at the Russian Mission Control Center TSUP, at which the MirCorp president, along with RSC Energia head of International Development Alexander Derechin, announced that Dennis Tito, a former US space program engineer, who founded Wilshire, Associated—the Santa Monica, California-based company that revolutionized the filed of investment management consulting, was MirCorp’s first “Citizen Explorer.”
Mr. Tito would subsequently withstand intense pressure brought on him and on Russian space officials, by NASA not to undertake his mission. NASA administrator Daniel Goldin publicly rebuked MirCorp for their efforts during Congressional hearings. Tito went forward with his training and eventually, with the deorbit of the Mir, he transferred his efforts to fly on the International Space Station. With the help of RSC Energia, MirCorp and later Space Adventurers, he became the first space tourist to visit the International Space Station.
[edit] The Tito Saga
Dennis Tito was not the first “amateur” to blast into space. Previously, a British lottery winner Helen Sharman and Japanese TV journalist Toyohiro Akiyama, had both flown on commercial missions to the Russian space station Mir. What might have made his mission different was that Tito was the first to pay for his own ticket, thus earning the designation of the first space tourist.
The Tito mission also took place in the backdrop of the whole controversy regarding the decision by the major Russian space company RSC Energia to work with MirCorp to create a commercial space station, and thus, many felt, put at risk the struggling Russia’s obligations on the planned International Space Station. NASA’s behavior about learning of the Tito mission was unusual. The space agency immediately cancelled planned high level meetings between the Russian and US space agencies. Their legal team declared that a bill would be sent for any damages caused by the flight of Tito.
"In November 2000, we informed NASA that we planned to launch Tito to [Alpha]," said Koptev, who did not recall NASA expressing any negative reaction at that time. That situation changed, however, as the two space powers entered into a standoff in which neither would back down. The head of the Russian Space Agency later told reporters that “Our legal advisors told us that the fine for any misdoing aboard the station, including damage to morale, could exceed the money that we had earned from Tito's contract, and could even exceed Russia's space budgetary capacity," Koptev said. The reaction after the eventual mission to the International Space station, not to the Mir as initially planned, was harsh and personal. Dan Goldin, NASA administrator, implied that Dennis Tito was not an American patriot and US Sen. Barbara Mikulski of Maryland compared the behavior of all those concerned with the space tourist program to that of “pimps.”
The Senator’s harsh views reflected many in Washington who regarded with disdain the concept of commercialization connecting with national space programs.
[edit] The End Days
By the end of the 73 day MirCorp mission, the company enjoyed a $70 million dollar backlog in customer orders. But the decision was made by Russia to yield to the American pressures and deorbit the station; in addition, the two financial investors were late on their payments and new investors were frightened off by the negative publicity from NASA.
The company remained in business even after the Mir was destroyed. It handled the efforts of *NSync boy band Lance Bass’s unsuccessful effort to fly to space, as well as that of former NASA official Laura Garver, who also sought to use advertising as a means to be a space tourist, before finally closing the doors. MirCorp launched the new era of commercial space exploration. It showed that a private company could manage a manned space station; that a business model could be developed around an orbiting space station. Today the situation has changed. NASA’s administrator Michael Griffin has voiced full support for commercialization of manned space activities and the Russian operated space tourist program is fully accepted by the United States.
The space tourism program has continued in Russia, which today enjoys far more robust funding than a decade ago. It does seem to reflect the view of the Russians that involvement of everyday people is good for the future of space exploration, and not an act of desperation, as many implied at the onset.
