Network18 has announced that it is selling its entire stake in financial data and news terminal provider NewsWire18 to private equity firm Samara Capital.
This is in line with its stated objective of divesting non-core assets profitably to allow greater focus on its core television and digital businesses.
Network18 was the majority shareholder in NewsWire18, having incubated the company with the founding CEO, Pankaj Aher and his team. The total transaction will result in proceeds of Rs 90 crore for Network18 in consideration for divesting its entire stake in the business. The transaction is expected to add approximately Rs 70 crore to Network18’s consolidated pre-tax profit for the current quarter. NewsWire18 will also be rechristened over the next 90 days as a result of the transaction.
Announcing the transaction, Raghav Bahl, Managing Director, Network18 said that, “The divestiture of Newswire18, India’s leading financial data and news terminal business is a reflection of our commitment to profitably monetize non-core assets for the benefit of our shareholders and to also facilitate the growth of these businesses to the next level. We are proud to have partnered with NewsWire18 in its journey thus far and are confident that Pankaj and his team will continue to excel and build one of the finest financial data businesses in India.”
Commenting on the deal, Sai Kumar, Group CEO, said, “In a few short years, NewsWire18 has grown into a leader in its space and we take great pride and pleasure in having written this wonderful growth story. The growth at NewsWire18 is a reflection of Network18’s business building skills and the value that our network eco-system brings to a business. We would like to give Pankaj and his team and Samara Capital our best wishes as they embark on the next phase of their journey.”
Said Paurush Roy, Managing Director at Samara India Advisors Pvt. Ltd. said, “We believe the information services market in India is at the cusp of significant growth and provides for exciting opportunities. NewsWire18 is well positioned to capture this opportunity because of its strong market position in India, understanding of the local market, customer centricity, and above all its world class and committed management team.â€
Samara Capital’s investments include companies such as Flemingo Duty Free, Thriveni Earthmovers, Monte Carlo Fashions, Thyrocare Technologies, Ratnakar Bank among others. The divestment of NewsWire18 forms a part of a series of asset monetization transactions by Network18. Earlier this year, Network18 had profitably sold its stake in one of the Capital18 investee companies NetworkPlay and then partially diluted its stake in India’s premier Digital Commerce asset Bookmyshow.com. BMR Advisors acted as the sole transaction adviser. Finsight Financial Advisors assisted the NewsWire18 founding team on the transaction.
In a move to further bolster growth plans, Network18 Publishing has elevated Mukhtar Qureshi, EVP, Sales to COO, Business Directories Division. Infomedia18’s publishing business, recently demerged and consolidated within Network18 under ‘Network18 Publishing’, encompasses three divisions of Infomedia18’s publishing business – Business to Consumer (B2C) magazines, Business to Business (B2B) magazines and Business Directories Division (BDD).
Commenting on the development, Sandeep Khosla, CEO, Network18 Publishing said: “The Business Directories Division, especially its yellow pages stable, is core to our growth plans for Network18 Publishing. As we scale up and expand our suite of products and services across touch points, Mukhtar’s proven track record and unparalleled experience in this space will be critical for us. I look forward to working closely with him as we further strengthen our leadership in the business directories space.”
Talking about his appointment, Mukhtar Qureshi said: “At the Business Directories Division, we’ll continue to be focused on fulfilling the growing aspirations of the Indian SME. Our widespread presence under the Yellow Pages umbrella and deep customer relationships provides us with an enormous opportunity to diversify our offerings and innovate through integrated media solutions. It’s been an exciting journey so far and I hope to build further on it going forward.”
Starting his career with Tata Press, Mr Qureshi brings with him over 21 years of experience in sales and operations. He holds a degree in commerce and law from theGovernmentLawCollege(Mumbai).
Hardly had the news of the acquisition of English news channel NewsX by ITV Media Group and Hindi news channel Live India by Prosperity Agro filterd in, there were murmurs on whether it was vital for the government to impose entry barriers for the news media. ITV of course has been in the news for around five years and Live India already had a sizeable stake by a property developer HDIL.
As part of MxM Mondays, we spoke to a cross-section of news media practitioners to offer their views on the issue.
This issue of media ownership has been debated on in the past, and more so recently, because of the entry of corporate groups into the news media. Earlier this year we saw two big corporates enter the media domain, when Reliance Industries bought a stake in Raghav Behl-led Network18 and Aditya Birla Group invested in the Aroon Purie-led Living Media India.
While big business owning media is not a new phenomenon, there are numerous instance of politicians owning and controlling sections of the media, especially in Southern India.
Hence the question arises: Is it a cause for worry when people with non-media interests start owning the mass news media?
Here are a cross-section of views from captains of the industry (in alphabetical order of their last names):
Tariq Ansari, Chairman and Managing Director, Next Mediaworks Ltd
Tariq Ansari
The worry is not around who owns the media but whether they act in a way that is consistent with journalistic standards of integrity and fair play. We seem to have forgotten simple journalistic conventions like a declaration of interest from the owner of the publication/channel on stories in which there is a substantial commercial interest.
Media, much like steel or fertilisers or communications, will eventually belong to those who have the means and desire to invest in it. The point about it being the preserve of a few is inexplicable. Nobody is stopping anyone from raising the capital to start a newspaper/magazine/TV station/radio station/website. We live in a free country. Anyone who has the ability to own media should be able to do so, without limitation. Clearly my preference would be that criminals or those with clear vested interest should not own media, but I am not sure if the law of the land can prevent this from happening.
Vinod Mehta
Vinod Mehta, Former Editor-in-Chief, Outlook magazine
I am worried. Media diversity is very important for freedom of the press. I don’t want Media in the hands of a few owners. It should be open to all.
And here’s what MxMIndia’s regular columnists say:
Ranjona Banerji, senior journalist, columnist and Contributing Editor, MxMIndia
Media ownership is a worry to the extent that journalists are not able to withstand corporate pressure. For instance, the Birlas started Hindustan Times and the Tatas has a stake in The Statesman (to name just two) and the battle between marketing and editorial is as old as the profession. The problem comes when senior editors capitulate and reader interest is surrendered or sacrificed. I would turn the spotlight back on journalists: are we fighting the good fight?
Many years back when I asked a leading industrialist why he was keen on starting a news channel he replied with the famed Deewar dialogue (some alcohol in the system did the trick): Aaj mere paas buildingey hai, gaadi hai, bank balance hai, but even then these guys owning newspapers and channels are ruling the world. We were in the late 1990s, and journalists and news media owners were indeed much sought after. That may have waned over the years, but the desire to own news media stays. What hasn’t changed is that the intent of owning the news media goes far beyond returns on investments.
When the British ruled India, it was the desire to mobilize public opinion that led to several national leaders and even businessmen to embrace news. Post-Independence, with the birth of a new economy, it was a mix of nationalistic sentiment and also to use it as an ally in a tightly controlled business environment. The ’60s and ’70s saw the media taking off with magazines like the Illustrated Weekly of India, later India Today and several others in regional languages. The imposition of the Emergency got people to realize the importance of the news media as the liberalization of the economy and and the airwaves ensured that there is no looking back.
Being a democracy, there are no entry barriers to the media. And rightly so. However, when a few years back a few real estate and assorted players jumped into news television there were representations to the information and broadcasting ministry that there ought to be tighter controls.
The current murmurs are being heard because NewsX has been acquired by businessman Kartikeya Sharma. ITV, his media company, also runs the newspaper Aaj Samaj and regional and Hindi news network India News. And the reason for the concern: it was feared that being the brother of Manu Sharma who has been convicted in the Jessica Lallmurder case, he could misuse his position to influence the executive and the judiciary. Well, the Supreme Court upheld its sentence of life imprisonment in 2010, so evidently he didn’t achieve much. To be fair to Sharma, a senior editorial and business executive who has worked with him, told me that he saw no interference on content, especially on the Manu Sharma front.
Clearly, the money power of rich businessmen and politicians cannot bring in readers or viewers, as the case may be or make a success of the media enterprise. In the late’80s, the Ambanis acquired Commerce Weekly and converted it into a business daily. They also acquired The Sunday Observer that was once edited by Vinod Mehta and was exceedingly popular.  The Ambani indulgence in the media failed despite hiring top journalists and publishing executives. They could only use the papers to fight a few minor battles, and even those without much success.
Mehta worked and fell out with industrialists Vijaypat Singhani and L M Thapar as both found news too hot to handle and counter-productive to their primary businesses (and revenues). One had assumed he would meet the same fate when Rajan Raheja, a then-emerging industrialist with some interests in real estate, set up the Outlook magazine group. Mehta has led many battles with the mighty and powerful in his magazine and both Raheja and Mehta have survived each other.
Save the Outlook example which is a good indicator of business interests and independent journalism co-existing, clearly big money is not enough to drive consumption of news media. My worry though lies elsewhere:
1. Lack of transparency in the ownership of media.
2. Creation of a monopolistic scenario with business groups investing in multiple and similar vehicles
3. Level playing field for competition in case of vertical and/or horizontal cross-ownership, and
4. Diversification of media companies into entities beyond news
1 & 2. Transparency requirements in media ownership are critical. When the government announced recently that a certain conglomerate doesn’t not have interests in the media, is it really the case, or is that what is on paper and hence deemed correct? While doubts have been raised about how the acquisition of a sizeable chunk of Network 18 via an independent trust would impact the editorial independence of the group, the real worry is the rumoured interests of the group in other media ventures too.
Could we have a situation that a genre of channels or newspapers or the media entities in particular region of the country be owned – directly or indirectly – by one group? How do we tackle a monopolistic scenario such as this?
3. The PR head of a radio station in Delhi once complained that she could never hope to get her press release into the two main English dailies in the city because both had their own FM stations. So, while the most inane event from the group’s radio station gets covered, the lady’s FM frequency never got a mention even for a big activity. So rampant is this blacking out of a rival group’s activities that it’s now considered standard practice. In many countries there are strict rules for horizontal and vertical cross-ownership. While the TRAI has suggested restrictions in vertical ownership (a TV channel can’t fully own a DTH or cable platform etc), horizontal ownership is fine (so a TV channel can also run a newspaper, radio station etc).
4. The last of my worry areas can be a bigger concern, and, if misused, even graver than big business or a political party getting into the media. Many news media groups have invested in sectors outside of news and doubts have been expressed if there is any connect between the relationships with governments via the news media and the winning of such contracts.
Even though the government at the Centre is weak, and we can be sure it will flex its muscles often enough in the run-up to various elections until 2014, I don’t see any immediate solution to the problem. But what can play a deterrent for those who abuse the media will be public opinion via social media.
Sevanti Ninan, Editor, thehoot.org and Columnist, Mint
Sevanti Ninan
Yes, it is a cause for worry when people with vested interests start owning the mass media because political ownership of the media is increasing, and there are no transparency requirements on media ownership.
Readers and viewers are unable to discern ownership-related biases. There is also a renewed trend of corporate investment in media increasing. Media companies are supposed to file ownership details with the registrar of companies, but one, it is not properly done, and two it is very difficult for lay people to access the correct and latest data.
On the issue of media being a preserve of only a certain groups, even now it is fairly widely owned.
Maheshwar Peri, Chairman, Pathfinder Publishing India Pvt ltd
Maheshwar Peri
In my opinion there is no cause for worry. I think, increasingly, the cause for worry comes from a few industrialists who’ve gotten into media. But if you go back to the flag bearers of Indian journalism in the 1980s, Indian Express was owned by RNG, an industrial group. So, to say that ownership by industrialists would hurt media is a slightly wrong way of looking at it.
There is definitely a cause for worry when people get into media for reasons other than running it as a professional empire. If you look at some of the politicians who’ve come into media or political parties that are launching their own channels, that’s a cause for worry because they have a reason to dish out news which suit their needs and opinions.
So there is a problem when people in public office get into media, but it’s not so much of a problem if industrialists or venture capitalists or any others moneybag get into it because they want to make it a commercially viable operation. And they know they can make it commercially viable only when the reader/viewer respects them. In case of politicians, they are not interested in making it commercially viable; they just want to ensure that their point of view finds a space in the public domain.
I think unless a reader or consumer respects you, you won’t be able to sell beyond a point. So all of us, whether or not owned by corporates, are always trying to ensure that we give unbiased and credible information so that the reader continues to respect us as well as the advertiser continues to invest in us.
And what makes one think that they have a better opinion about media than a fruit vendor? I don’t think there can be a classification of who has a better opinion about certain things in this country – we are a democracy. So the worse thing is to say that ‘these’ kind of people can get into media and ‘those’ kind cannot.
Tarun Tejpal, Editor-in-Chief, Tehelka magazine
Tarun Tejpal
To some extent, there is cause to worry about media ownership. We have to air, discuss and examine issues of monopolies, cross media ownerships, and of cross business ownerships. And to try and build in some structural safeguards that both help ensure the financial viability of honest, robust media, and deter media owners from using their media instruments for unfair advantage in their other businesses.
Theoretically, it (media) should be open to all. But we must build in safeguards that minimize the misuse of public discourse and public instruments of media. This is not easy, but a discussion must start on this issue at all levels.
Paranjoy Guha Thakurta, Senior Journalist
Paranjoy Guha Thakurta
The growing corporatization of the Indian media is manifest in the manner in which large industrial conglomerates are acquiring direct and indirect interest in media groups. There is also a growing convergence between creators/producers of media content and those who distribute/disseminate the content.
In India’s unique ‘mediascape’, it is often contended that the proliferation of publications, radio stations, television channels, and internet websites is a sure-fire guarantor for plurality, diversity, and consumer choice. There were over 82,000 publications registered with the Registrar of Newspapers. There are over 250 FM radio stations in the country. Despite these impressive numbers of publications, radio stations and television channels, the mass media in India is possibly dominated by less than a hundred large groups or conglomerates, which exercise considerable influence on what is read, heard, and watched.
One example will illustrate this contention. Delhi is the only urban area in the world with 16 English daily newspapers; the top three publications, the Times of India, the Hindustan Times, and the Economic Times, would account for over three-fourths of the total market for all English dailies.
However, what is unacceptable is media barons using news outlets as tools to further their business interests. In this country, as in the world over, large media corporations are clearly playing a bigger role in the political economy that they report on. Though a free media is fundamental to the existence of a liberal democracy, concerns about the accountability and transparency of media companies remain. For instance, the RIL deal has enabled Network 18, Eenadu, and the merged group to expand its offerings to benefit its stakeholders and its advertising target audiences. What remains to be seen is whether clear boundaries can be etched between the boardroom and the newsroom.
There’s absolutely no doubt about the fact that if it’s truly going to be a responsive media, then the media should reflect the views, the interests, the aspirations of a larger section of population as possible. The problem with much of our media is that they are too busy trying to ‘reach’ consumers to potential advertisers than providing information to citizens.
Next Week:
Why do we all like to damn TAM?
The Sectoral Innovation Council recommendations last week said that there was need for an alternative to TAM, short for the media research company formed by a jv of two international research biggies: Nielsen and Kantar. This is a view that has been expressed several times over the years.
One of the main peeves against TAM is the number of Peoplemeter boxes present to collect data. Can 8000+ boxes effectively poll a populace of 1.2 billion, is what many broadcasters keep asking in public. In private though, not many are ready to pay up by increasing their subscription fee to enable the installation of more boxes across the country.
Also, what’s happening to BARC, the joint industry body that was to provide an alternative?
MxMIndia will speak to a cross-section of the industry to get answers. Meanwhile, if you have a view, email it to us at editor@mxmindia.com with the subject ‘MxM Mondays #2’
Infomedia18’s publishing business has de-merged and consolidated within Network18 framework under ‘Network18 Publishing’ following the de-merger approved by the Delhi High Court in 2011. The printing press business will continue to remain with Infomedia18.
Speaking about the development, Sandeep Khosla, earlier the CEO-Publishing at Infomedia18, and now at the helm as CEO, Network18 Publishing, said: “As Network18 Publishing, our growth strategy will evolve in line with an increasingly multi-platform publishing environment. Considering the strong traction of our brands in key consumer and business communities, our focus will be on leveraging this across areas – including print, new media, on-ground activation and value-added services. We hope to build on this further by maximizing synergies with group platforms and in the process deepen engagement with our audiences and aid monetization of our brands.”
Network18 Publishing will encompass three divisions of Infomedia18’s publishing business – Business to Consumer (B2C) magazines, Business to Business (B2B) magazines and Business Directories Division (BDD).
The popular titles that will now come under the Network18 Publishing umbrella are as follows:
B2B: Search, Auto Monitor, Modern Machine Tools, Chemical World, Modern Plastics & Polymers, Modern Packaging & Design, Modern Medicare, Modern Pharmaceuticals, Modern Food Processing, Smart Logistics, Aftermarket.
Business Directories: Multi-city editions of Yellow Pages Business Directories, Machine Tool Guide, Indian Exporters Guide, Construction and Interior Design Guide, Industries State Guide and Motor Pumps & Valves directories.
B Sai Kumar, group CEO, Network18 said: “We believe that the special interest and B2B spaces will be one of the key drivers for publishing in India, both in print and new media. With Network18 Publishing, we’ve aligned our assets to capitalize on this trend, both from a community building as well as a commercial perspective. Going forward, as publishing models develop, this alignment will significantly enhance our market proposition”
In addition, Network18 Publishing will also manage production and circulation operations for titles from the Forbes India stable which currently includes Forbes India and Forbes Life India.
Distribution veteran Anuj Gandhi has joined Network18 as Group Director, Distribution & New business development, with immediate effect.
Mr Gandhi brings with him almost two decades of rich broadcast experience, across a variety of mandates including leadership roles at some of India’s leading distribution companies and broadcast networks.
Speaking on this development, Mr B Sai Kumar, Group CEO, Network18 said: “Broadcast digitization and growth in new media will cause paradigm shifts in how media brands create value in the future. Our bouquet of channels straddling genres from news and entertainment to kids, music, factual entertainment etc across national and regional spaces is uniquely placed to make the most of this opportunity and we are delighted to have Anuj on board to drive it. His experience & understanding of broadcasting and distribution in India and his leadership record is impeccable, positioning him well for this task”
Added Mr Gandhi: “Network18 is a benchmark player in the broadcast and new media space in India and it is now at a very exciting stage in its journey. I look forward to being part of it at such a momentous time and hope to work closely with the team to unlock value for our brands in an increasingly digitized environment”
Homeshop18.com has added to books vertical an all new user-friendly online bookstore having a massive catalogue of over 10 million books in more than 100+ categories.
The acquisition of CoinJoos.com has helped HomeShop18 strengthen its books business and tap the massive books market in the country. The company has spruced up its technology backbone to offer book lovers a world-class book shopping experience through a superior browse and search experience.
Commenting on HomeShop18.com’s bookstore going online, Sundeep Malhotra, Founder and CEO, HomeShop18 said, “Books are a critical part of our e-commerce growth strategy and the launch of our bookstore plugs the gap which we felt we had in our product range. This is a category which touches all demographic groups and, therefore, a very critical one and we are very excited to add books to our range of offerings”.
The initiative will make it easier for book lovers across the country to shop much more conveniently with HomeShop18 offering both online payment and cash on delivery options. The company is also expected to make further announcements in the books category in the coming weeks.
HomeShop18 is Network18 group’s online and television retail marketing and distribution venture, and offers a wide product range across several categories.
Purveyors of news are rarely objects of news themselves, but India’s splintered media landscape has made news in the past two weeks. A flurry of deals or talk of more similar transactions have stirred up the sector in recent days, putting the spotlight on the possible motivations and some crystal ball gazing on what lies ahead.
Last week saw a little-known chemical and fertiliser company Oswal Green Tech buying a 14.17per cent shareholding in New Delhi Television (NDTV) through two block stock market deals. Media reports said Mukesh Ambani-controlled Reliance was looking at buying into Network18, which runs CNBC India. Before him, younger brother Anil’s firm Reliance Capital increased its shareholding in UTV News, which runs Bloomberg TV, by buying out UTV founder Ronnie Screwvala’s 66 per cent stake.
Industry executives and experts believe the consolidation trend will pick up momentum in 2012, separating the men from the boys in this highly splintered sector that is being increasingly hobbled by cost pressures and revenue challenges in a slowing economy.
With more than 700 television channels in India and only few making money, experts believe consolidation in the industry is inevitable.
“Consolidation has to happen. It is required,” said Mr Haresh Chawla, who recently announced his resignation as group chief executive officer of Network18 and Viacom18 after leading the company for more than a decade.
One major problem for the industry is that it has been too dependent on advertising revenues, while subscription revenues have been elusive.
Analysts say some signs of consolidation are already visible, as media companies cobble together bouquets of channels.
“It is already starting to happen and going forward, media companies will look at building a portfolio of broadcast assets across genres, geographies and languages to create a national setup,” said Mr Jehil Thakkar, head of the media and entertainment practice at KPMG.
The move towards regional channels, spread across geographies and genres, is triggered by the high growth in advertising revenues in the segment. Growth in advertising revenues in big cities has been around 12-13 per cent even in good times because of an inventory overhang, while regional advertising has been growing at more than 20 per cent for the last few years, say analysts.
Analysts say this could explain why Network18 may be looking at Eenadu TV. “Network18 does not have any regional channels in its portfolio. This move will give them an entry into the fast growing regional market,” said one analyst. Buying Eenadu TV could give Network18 a bouquet of 11 regional channels.
What may also be attracting new investors such as the Ambanis and foreign media companies such as Walt Disney is the promise of higher revenues and growth as the full benefits of digitalization kicks in. Collateral benefits of media ownership include access to content sources to power non-media business and potentially even some influence.
In the case of Reliance Industries, which is setting up a national 4G broadband service, ownership of a media company will give it an edge over competition, with access to exclusive content from a bouquet of channels as well as web properties.
The Cable Television Network (Regulation) Amendment Act, enacted two weeks ago, could help subscriptions finally become a good source of revenues for media companies, reducing their dependence on advertising. Today, a viewer pays as little as 50 paise to watch an hour of TV. Even this revenue does not reach the channels completely because of under-reporting by local cable operators.
“This (the digitalisation law) will be a game-changer for the television business if well executed,” said Mr Sunil Lulla, managing director and chief executive officer of Times Television Network, which runs Times Now, ET Now and Movies Now channels.
Meanwhile, some deals have already happened in the non-news segment, in anticipation of large changes in the sector. In July this year, Walt Disney Co said it is buying out rest of the 49.56 per cent stake in UTV Software Communications that it does not own from public shareholders and other promoters of the company for Rs 2,000 crore.
“There is clearly a need for sellers to look at strategic investors. For the buyers, in the long term there is value in Indian media,” said Mr Nikhil Vora, managing director and head of research at IDFC Securities.
India’s entertainment and media industry is estimated to grow at a compounded annual rate of 13 per cent to Rs 1,19,890 crore in 2015 from Rs 64,600 crore in 2010, PwC’s India Entertainment and Media Outlook for 2011 revealed earlier this year.
The sector’s woes, notably because of high costs and low subscription revenues, coupled with the general weakness in the markets have cast a dark shadow over media stocks. The market value of NDTV stood at Rs 171 crore on December 21, 2011, the day Oswal Green Tech, formerly Oswal Chemicals & Fertiliser, acquired its stake for around Rs 24 crore.
The company was worth Rs 215.66 crore on January 3, 2012, Rs 552.5 crore at the beginning of 2011 and Rs 3,300 crore at its peak in January 2008. Network18’s market value has dropped from Rs 1,540.7 crore on January 1, 2011, to Rs 535 crore as on January 3, 2012, while that of TV18 has dropped from Rs 2,122.4 crore to Rs 1,220.13 crore in the same period.
The sector trades at price earnings multiple of 18.3 compared with nearly 19 for the telecom sector or 21.43 for the technology sector.
While digitalisation will help increase subscription revenues and remove capacity constraints, it will also aid the process of consolidation in the sector by forcing smaller regional channels into the embrace of larger, pan-India players. Smaller regional channels are enjoying better advertising growth today, but after digitalisation they could face problems in getting themselves well placed in the line up of channels and may feel the need to be aligned with larger players either by selling out or through a distribution deal.
“Larger players with a bouquet of channels will have more bargaining power with cable operators. Smaller channels will find it difficult to get into prime tiers,” said Mr Chawla.
With valuations low, experts feel now may be the time for consolidation. “The overall multiples for media companies have been low for a while. This is a good time to buy. Broadcasting does present a good opportunity,” said Mr Thakkar.
Network 18 Media & Investments Limited, at the board meeting held on Tuesday, approved a Rights Issue of Equity Shares to raise an amount up to Rs 2,700 crore at a price to be determined by the Board in compliance with regulatory requirements, but not exceeding Rs 60 per equity share.
TV18 Broadcast Limited has approved a Rights Issue of Equity Shares to raise an amount up to Rs 2,700 crore at a price to be determined by the Board in compliance with regulatory requirements, but not exceeding Rs 40 per equity share.
Network18, being the promoter and holder of majority equity in TV18, would be subscribing to about Rs 1,400 crore in the TV18 Â rights issue – therefore, once this subscription amount is netted out, the Net Aggregate Rights Issue of both Network18 and TV18 will result in a fund raising of about Rs 4,000 crores.
The contribution of the current Promoter Entities of Network18 in this Net Aggregate Rights Issue of both Network18 and TV18 will be about Rs 1,700 crores.
TV18 will utilise the Rights Issue proceeds to repay the existing debt, fund the acquisition of ETV channels and fund working capital needs. Network18 will utilise the Rights Issue proceeds to repay the existing debt and subscribe to the Rights Issue of TV18.
The promoters of Network18 will be subscribing to their entitlement in full. They also reserve the right to subscribe to any unsubscribed public portion of the Rights Issues.
Raghav Bahl, the founder and promoter of Network18 and TV18, has informed that promoter companies have entered into an arrangement with Independent Media Trust, a trust set up for the benefit of Reliance Industries Limited, to secure the funding required for this purpose. Further, Mr Bahl will continue to retain the management and 51 per cent control over Network18 and 51 per cent control over TV18 through Network18.
Both the Companies will be filing the Draft Letters of Offer for their respective Rights Issues shortly.
Mr Bahl said: “This is a truly seminal moment in the 18-year-old history of Network18/TV18. By inducting such a significant amount of equity, our balance sheets will become among the strongest in the industry. Also, by acquiring this strategic control over several ETV channels, TV18 will have a bouquet of leading television channels. Riding on the imminent digital wave, I am convinced that this acquisition is a significant move which will catapult TV18 into the forefront of India’s broadcasting industry. The proposed preferred access arrangement with Infotel Broadband will ensure that our content & services will be available on India’s premier technology distribution platform. On a debt free basis, both Network18 and TV18 hope to strengthen their position in various media segments like news & entertainment broadcasting, consumer internet, digital & print publications, filmed entertainment, home-shopping, e-commerce and other emerging businesses.”
The Board of Directors of TV18 Broadcast Limited (TV18) during its meeting also approved the acquisition of 100 per cent interest in Hindi news channels, namely ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Rajasthan and ETV Bihar and ETV Urdu channel (ETV News Channels); 50 per cent interest in ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati and ETV Oriya (ETV non Telugu GEC Channels); and 24.5 per cent interest in ETV Telugu and ETV Telugu News (ETV Telugu Channels).
TV18 will have the Board and management control of ETV news channels and ETV non-Telugu GEC Channels. The Board has approved an outlay of up to Rs 2,100 crores for this acquisition. Legally binding agreements will be executed for this purpose. TV18 has an option to buy the balance 50 per cent interest in ETV non-Telugu GEC channels and an additional 24.5 per cent in ETV Telugu channels.
Ernst & Young Pvt Ltd acted as advisors for financial and tax due diligence and valuation of the assets. The legal due diligence was carried out by Khaitan & Co.
ETV is among the Top 5 most popularly viewed networks in the country. It was one of the first entrants in the regional markets and the channels have a considerable viewership base. One of the key strengths of ETV channels is their ability to attract and retain loyal viewers.
On a combined basis, TV18 will be offering a unique mix of national and regional channels, catering to diverse genres like Hindi and regional entertainment, general news in English, Hindi and regional languages; business news in Hindi, English and regional languages; music, kids, devotional and infotainment channels.
Including the soon-to-be-launched services/variants, this combined bouquet of over 25 channels will be the most powerful and potentially profitable TV operation in the country, especially since India’s television industry is on the verge of a digital revolution.
As a part of the deal for acquisition of ETV Channels, Network18 and TV18 have also entered into a Memorandum of Understanding with Infotel Broadband Services Limited, a subsidiary of Reliance Industries Limited, under which the companies and their associates will have the right to distribute the content of all the media and web properties of Network18; and programming and digital content of all the broadcasting channels (including the ETV channels being acquired by the company) through 4G Broadband Network of Infotel, which shall have preferential access to this content on a first right basis as a most preferred customer.
Infotel Broadband Services Limited is setting up a pan-India world class broadband wireless network, using state of the art technology. As per Images Year Book, more than 70 per cent of India’s population is below 35 years, and 50 per cent of the population is below 25 years of age. This young educated population will be keen to access quality content through wireless devices, thereby ensuring a rapid growth in subscribers similar to the growth of tele-density in India during the last ten years.
The key advantage for millions of viewers will be the ability to enjoy an uninterrupted, high quality, 24-hour viewership, even while they are on the move. This tie-up with Infotel will enable Network18 and TV18 to build on their first-mover advantage for the distribution of their content through the latest broadband technology.
Viacom 18 Media Pvt. Ltd, an equal joint venture between Viacom Inc (NASDAQ: VIA, VIAB) and Network18, one of India’s leading entertainment conglomerates, on Wednesday announced the launch of its flagship channel, Aapka Colors in Canada.
The channel will be distributed through Asian Television Network International Limited (ATN) (TSX-SAT), Canada’s largest South Asian Broadcaster on Rogers Cable in Ontario and on recently launched Bell Fibe TV in Toronto & Montreal.
Starting immediately, ATN subscribers can tune in to Aapka Colors (Channel 690 on Rogers and Channel 790 on Bell Vibe TV), which is among the top two Hindi general entertainment channels in India. Viewers can look forward to captivating drama series, blockbuster Bollywood films, star-studded variety programs and nail-biting reality shows on one of the most-watched channels from India.
Moreover, subscribers will now be able to enjoy popular shows such as Balika Vadhu, Sasural
Simar Ka, Phulwa, Uttaran and Fear Factor – Khatron Ke Khiladi at the same time as the viewers in India.
Dr Shan Chandrasekar, president and CEO, ATN said: “We are delighted to have Viacom18 Media Pvt. Ltd as a programming partner and to share AAPKA COLORS, with its compelling content, across
Canada.”
Gaurav Gandhi, Head-Distribution & International Business-Viacom18 & COO Sun18, said: “We are delighted with the launch of Aapka Colors in Canada on the 2 leading platforms – Rogers and Bell Fibe, and fulfilling the demands of the South Asian diaspora with our very distinct and popular content offering.”
With this launch in Canada, Colors is now available in close to 50 countries globally.
Network18 has announced that it is selling its entire stake in financial data and news terminal provider NewsWire18 to private equity firm Samara Capital.
Media ownership is a worry to the extent that journalists are not able to withstand corporate pressure. For instance, the Birlas started Hindustan Times and the Tatas has a stake in The Statesman (to name just two) and the battle between marketing and editorial is as old as the profession. The problem comes when senior editors capitulate and reader interest is surrendered or sacrificed. I would turn the spotlight back on journalists: are we fighting the good fight?
Many years back when I asked a leading industrialist why he was keen on starting a news channel he replied with the famed Deewar dialogue (some alcohol in the system did the trick): Aaj mere paas buildingey hai, gaadi hai, bank balance hai, but even then these guys owning newspapers and channels are ruling the world. We were in the late 1990s, and journalists and news media owners were indeed much sought after. That may have waned over the years, but the desire to own news media stays. What hasn’t changed is that the intent of owning the news media goes far beyond returns on investments.
