'द हिंदू' के अलावा एक अन्य अंग्रेजी अखबार 'द मिंट' ने भी मुकेश अंबानी के स्वामित्व वाले नेटवर्क18 समूह के न्यूज चैनलों में छंटनी की खबर प्रकाशित की है. इस प्रकरण पर अब फेसबुक और ट्विटर समेत वेब-ब्लाग पर जोरदार चर्चा होने लगी है. लोग सवाल उठाने लगे हैं कि आखिर सैकड़ों की संख्या में हटाए गए मीडियाकर्मियों के पक्ष में आवाज उठाने के लिए और खबर दिखाने के लिए राजदीप सरदेसाई व आशुतोष के पास अब पत्रकारीय समझ या सरोकार या नैतिकता है या नहीं?
अगर इनमें तनिक भी पत्रकारीय बोध होता तो इतने बड़े पैमाने पर छंटनी होने देने की जगह ये लोग प्रबंधन के सामने अपना विरोध जाहिर करते और प्रबंधन के न मानने पर खुद का इस्तीफा सौंपते फिर छंटनी के शिकार पीड़ित पत्रकारों की लड़ाई की अगुवाई करते हुए एक नया पैमाना कायम करते, पत्रकारिता के उच्च आदर्शों की लाज रखते. पर ऐसा नहीं हुआ. डंके की चोट पर बातें आगे भी चैनलों पर दिखाई सुनाई जाएंगी पर उसमें मीडिया वालों की छंटनी की खबर नहीं होगी. पेश है द मिंट में प्रकाशित खबर…
TV18 Group restructures operations
Streamlining process that seeks to reduce costs includes integration with Hyderabad-based ETV
Mumbai: The TV18 Group is in the midst of a significant restructuring exercise that involves integrating at least some of its multiple newsrooms, making operations more efficient, and reducing costs as it seeks to cope with a turbulent economic climate that had made stock and currency markets volatile, slowed economic growth and, consequently, affected the advertising market.
The integration as well as the workforce reduction by TV18, which runs news channels such as CNN-IBN, CNBC-TV18, and IBN7, and websites such as moneycontrol.com and Firstpost.in, is not very different from that undertaken by several Western newsrooms including The New York Times and the Washington Post over the past few years, and comes in the wake of similar announcements by some Indian media companies. Still, the indirect control Reliance Industries Ltd has over the media house has set tongues wagging that the restructuring is being engineered by the conglomerate and, the buzz would have it, even chairman Mukesh Ambani.
A year-and-a-half ago, Reliance committed around Rs.4,800 crore in cash and assets to what is one of India’s biggest media houses.
On the cards is the integration of the operations of the TV18 Group with Hyderabad-based Eenadu Television—better known by its screen name ETV—which runs more than a dozen news and general entertainment channels in regional languages. The ETV channels were almost entirely owned by RIL chairman Mukesh Ambani-controlled firms, except two in which their founder Ramoji Rao has a controlling stake.
At least two consulting firms—EY and Mercer—are advising the TV18 Group on streamlining its resources, according to people familiar with developments. All the people Mint spoke to for this story asked not to be identified.
Employees of ETV and the TV18 Group fear a few hundred people may be made redundant. Some employees have already been asked to quit. On Monday, the company announced that CNN-IBN and IBN7 CEO Dilip Venkatraman had resigned.
Emails sent to managing director Raghav Bahl, EY and RIL remained unanswered as of press time. Bahl didn’t answer phone calls and text messages sent to him. The TV18 Group hadn’t responded as of Tuesday. Mercer said in an emailed statement that it wouldn’t comment on the story in the interests of client confidentiality, without confirming whether it was advising the TV18 Group.
TV18 Broadcast Ltd, the firm that operates four news channels, has around 1,900 employees. Mint couldn’t immediately ascertain the staff strength of ETV.
In fiscal 2013, TV18’s operating profit margin was 20% of net revenue of Rs.541.5 crore. The margin is under pressure and, of its three main cost heads—staff, production and distribution—it has targeted the first two to shore up profitability.
Most of those likely to be laid off are from the editorial and technical teams. The marketing team is pretty lean as it is, said a person familiar with the development.
Under the agreement between Ambani and Bahl, a journalist-turned-entrepreneur, firms owned by Ambani have already made an investment of around Rs.2,200 crore in cash.
RIL, or any Ambani-controlled firm, does not immediately intend to come to the forefront and run the TV18 Group, according to people familiar with the arrangement. The group hasn’t till date even asked for representation on the board, one senior TV18 official said. But it reserves the right to do so under its funding agreement with Bahl, regulatory filings show.
“RIL wants to maintain an arm’s length,” said a person who advised TV18 on its deal with Ambani. “That’s how these industrial groups typically work when it comes to investment in media companies.”
Though it does not immediately have any direct control over TV18 or Network18 Media and Investments Ltd—the listed holding firm for the group’s diverse businesses—loans from Ambani’s companies to Bahl’s private holding arms can be converted into shares, and that could wipe out the TV18 Group founder’s control over the media conglomerate almost entirely.
A 28 May Competition Commission of India order says Ambani-led firms could claim a 99.9% stake in each of Bahl’s six private holding companies if the former chooses to fully convert into shares the loans given to them through 10-year, zero-coupon convertible debentures of Rs.100 each. These are convertible at the call of the lender at any time within 10 years. The CCI also said in its order that the arrangement amounts to change in control because Ambani-controlled entities have secured irrevocable contractual rights to take a near-100% stake in the investment companies through which Bahl owns the media group.
Bahl used the money received through six private firms to capitalize Network18 and TV18, which in September-October last year raised Rs.2,700 crore each through rights issues. As around Rs.1,400 crore raised through Network18’s rights issue went into subscribing to TV18’s rights issue, the two companies together effectively raised Rs.4,000 crore of fresh capital.
By subscribing to shares not bought by others in the rights issue, the holding of Bahl’s investment arms in Network18 rose from 48.3% to 73% at a cost of around Rs.2,100 crore. His holding in TV18, however, fell marginally from 59.76% to 57.04% despite buying shares worth Rs.1,520 crore. Alongside, two Ambani-controlled firms acquired a 5% stake each in these two companies.
Of the Rs.4,000 crore raised through the share sales, the TV18 Group used Rs.1,950 crore to pay for the ETV acquisition and around Rs.1,530 crore to retire its debts. The takeover gave the TV18 Group 100% control of ETV’s news channels, a 50% stake in its non-Telugu general entertainment channels and a 24.5% stake in two Telugu channels.
The agreement between Bahl and Ambani’s firms envisaged a second transaction to conclude the ETV purchase, under which TV18 was to pay Rs.1,445 crore more for the remaining 50% stake in the non-Telugu general entertainment channels and 24.5% more in the two Telugu channels. These two are still controlled by ETV founder Rao, who owns a 51% stake in them.
TV18 said in the offer document for its rights issue that it would have to raise additional resources for the second leg of the ETV transaction. Though it didn’t say how it would pay for Ambani’s rump stake in the network, people familiar with the plans said the money would have come from RIL.
However, the second transaction, which was to be concluded by March, got stalled because shares of the firms that controlled the ETV channels weren’t transferred to TV18 for want of regulatory clearance.
Alongside streamlining resources to become more profitable, TV18 is cashing out of investments made by it outside the broadcasting space.
Some of these acquisitions had gone “horribly wrong”, according a second TV18 official. “The Tata Donnelley (Ltd) acquisition bled us by Rs.250 crore,” he added. The company, which published the Yellow Pages, was renamed Infomedia18 Ltd. TV18 sold some of the businesses of this firm earlier this year, and is looking for buyers for others.
It also sold Newswire18, a news agency, to Samara Capital, and a 20% stake in its ticket-booking portal Bookmyshow.com. It recently sold a stake in its e-commerce venture Homeshop18 at a “significant profit”. In the June quarter, it reported a Rs.82 crore gain from the stake dilution. Almost all these transactions took place after Ambani took an interest in the TV18 Group.
Network18 continued the “profitable monetization of investments”, Bahl was cited as saying in the June quarter results statement.
“There were pockets of weaknesses in our portfolio and we are committed to improving segments that are not meeting expectations,” he said.
A third executive, who has spent many years at the TV18 Group, said Bahl, being a first-generation entrepreneur, did not have the money to expand his broadcasting business with equity funding. Under Indian regulations, the promoters’ stake in a news channel cannot get diluted below 51%, making him dependent on loans, according to this person.
As little as 10 years ago, CNBC-TV18 was the only significant business in the group, run out of a small office in central Delhi near Karol Bagh and “almost out of a garage” in Mumbai, he recalled.
The big expansion started in 2005, when the group hired Rajdeep Sardesai from rival NDTV to launch its general news channel in English. “Raghav and (former chief executive officer) Haresh (Chawla) never looked back again,” said the person.
However, everytime the group entered a new business, it set up a new newsroom, including support staff.
Until it fell on bad times, the group treated borrowings as “growth capital”, but as the economy went into a tailspin, Bahl realized “there was no alternative to ceding control”. He did so to a group that would allow him to run the show, at least as of now, a “win-win for both”, this executive said.
TV18 has outstanding brands that have the ability to generate revenue disproportionate to their size, said an analyst who added that this was one way in which the group is different from other groups.
According to data available with TAM (Television Audience Measurement) Media Research, between weeks 23 and 30 (3 June to 28 July), Times Now, the general English news channel of Bennett, Coleman and Co. Ltd (BCCL), had the highest viewership among male audiences of more than 25 years of age in the SEC (Socio-Economic Class) A category, with a Gross Rating Point (GRP) of 2.4. CNN-IBN was second with a GRP of 1.6 and CNBC-TV18 was third with a GRP of 1.22. General news channel NDTV 24×7 ranked below CNBC-TV18 with a GRP of 1.15.
The strength of the TV18 news channels lies in their being distributed as part of IndiaCast, which includes entertainment and children’s channels, unlike NDTV for instance, said a person who has worked closely with TV18 in the past. IndiaCast is a joint venture between TV18 and Viacom18 that distributes all the channels of TV18 and Viacom18 across platforms such as cable, direct-to-home (DTH) and Internet protocol TV (IPTV).
Given current market reality, though—slowing ad spending, an economy in trouble—the company will have to rationalize marketing, distribution and programme costs, the analyst said. Still, it isn’t exactly comparable with any other group since it is highly diversified, not family-owned, and professionally run.
But one of its weaknesses is that it has probably spread itself too thin, said a consultant. Now it is setting out to reverse the whole process, getting rid of the non-core businesses and consolidating, added this person, who asked not to be identified.
“Business goes through a lifecycle where it has to assess its core strengths. It either diversifies or consolidates. And there are no right or wrong answers here. Companies need to plan for the future. And rationalizing does not mean downsizing alone. It means re-skilling and redeploying people,” said the consultant.