ZEE TELEFILMS-STAR TV MERGER: ASIAN EXECUTIVES EXPECT IT TO HAPPEN

Senior executives running TV channels in Asia believe the merger between Zee Telefilms and Star TV in India is almost a certainty. Off-the-record chats with them reveal that they believe that both Rupert Murdoch and Subhash Chandra have come to some sort of an agreement. And that a deal between the two will be in place before 1999 is out and done with.

One view is that it is Murdoch, who is driving the collaboration effort as he wants to move from an operational interest to a shareholder interest. A Singapore based executive said that Murdoch is getting impatient with the losses that have been piling up at Star TV in Asia and more so in India. His age and the new love (a senior Hong Kong Star TV executive) in his life may have something to do with that, she added.

Gareth Chang, the recently-appointed Star TV Asia chairman, told a Singapore-based trade magazine that both Zee TV and Star TV were considering a new 50:50 venture. "Well, News Corp doesn't necessarily have to have controlling interest," he said. "What's important is to ensure the business model is a viable and successful one."

Star TV's fortunes in China have improved in the past year and it is likely that Murdoch will focus his attention on the market which has around 300 million TV homes with 70 million of them having access to cable and satellite television. Last week, a photograph of Murdoch shaking hands with China president Jiang Zemin, was splashed on the front-page of official newspaper China Daily, clearly indicating that any misunderstanding between the two is a thing of the past.

It is believed that he will leave the management of his Indian network to Zee TV, unless miraculously the ban on direct-to-home television is lifted within the next month or two. Earlier, this month a senior Star TV team made a presentation to senior ministry officials on what its plans are for the DTH segment in India.

The Zee Telefilms share meanwhile continued in its free fall last week ending at a low of Rs 543 against a peak of Rs 748 a couple of months ago on the Mumbai stock exchange. It seems as if the stock market has discounted the news of the new alliance between Zee TV and Star TV India.