Zee Media's 49% stake in 92.7 BIG FM gets it 59 radio channels

NEW DELHI: Zee Media Corporation Limited (ZMCL)?s Board of Directors today approved acquisition of 49 per cent stake in 92.7 BIG FM, the radio broadcasting business of Reliance Broadcast Network Limited (RBNL), part of Anil Ambani-led Reliance ADA group. This will give Zee access to 45 running FM radio channels, apart from 14 other licences.

As per the agreement with ZMCL, which controls Zee group?s news-related businesses, RBNL shall be transferring the 45 operational and 14 new licenses into two special purpose vehicles (SPVs), respectively, along with the assets and liabilities. Zee shall acquire 49 per cent stake in each of these two SPVs named Vrushvik Entertainment Private Limited (VEPL) and Azalia Media Services Private Limited (AMSPL).

ZMCL and Reliance Broadcast shall also have a call/put option to acquire/sell the balance 51 per cent after the lock-in provisions on the permission holder of these licenses expire. As per government regulations, at least 51 per cent shareholding needs to be held by the permission holder for a minimum period of three years from the date the radio channels were operationalized.

RBNL runs one of the largest network of FM radio channels in India, which include 45 operational licenses (issued under Phase II and migrated to Phase III) and 14 new licenses (issued under Phase III). The FM channels are broadcast under the brand 92.7 BIG FM that reaches 45 cities, 1,200 towns and over 200 million people.

The lock-in period for the 45 operational licenses shall expire on 31 March 2018, while the lock-in period for the other 14 licenses are expected to expire around March 2020.

ZMCL COO Rajiv Singh in a statement said, ?We are pleased to announce this acquisition, which shall not only be complementary to our current business but accelerate its growth too. We are currently running successfully a bouquet of 11 news and current affair channels and with the addition of 59 radio licenses, we will be reaching out to a much increased audience base and will keep them engaged on different media platforms. This acquisition shall bring about the desired business diversity and will help in achieving the sound financial objectives at an accelerated pace.?

The proposed transaction, which is subject to regulatory approvals, including that from Ministry of Information & Broadcasting (MIB), is expected to close in the first half of calendar year 2017.

Commenting on the divestment of stake, Reliance Capital ED and Group CEO Sam Ghosh said, ?We are happy to bring in Zee Media as our partner in the Radio business. This transaction is part of our strategy to reduce exposure in non-core businesses and work towards further reducing debt under Reliance Capital?. 

Why has Zee re-entered the FM radio business (remember it bid for licences in the first round FM radio auctions years back)? 

According to ZMCL, the radio assets become attractive for the following reasons; especially as the Phase III of FM radio expansion has liberal regulations compared to earlier phases: 

- higher penetration leading to economies of scale

- centralized broadcasting (networking) allowed

- radio services in larger number of cities leading to increased advertisement budget allocation

- multiple frequencies in same geography resulting in content differentiation

- varied content such as news, sports, current affairs, sports, etc allowed

- license tenor increased to 15 years from 10 years

Whether the re-entry into radio business bears fruits remains to be seen and will also depend on the condition of the general economic conditions in the country that is currently unsettled a bit because of the government?s move to demonetise currency notes of Rs. 500 and Rs. 1,000 denominations.

Latest Reads
TRAI releases paper on OTT expanding its definition

India’s telecom and broadcast regulator TRAI today released another consultation paper on OTT services seeking to expand the definition of the sector and also the regulator’s jurisdiction over a sector hitherto “unregulated”.

Regulators TRAI
MIB extends feedback deadline date on mandatory sports feed sharing norms

Ministry of Information and Broadcasting (MIB) has extended the deadline to give feedback on the draft sports broadcasting signals (Mandatory Sharing with Prasar Bharti) (Amendment) Bill, 2018 till 31 December 2018.

Regulators I&B Ministry
MIB gives permission to two new channels - Khalsa and Nireekshana TV

The Ministry of Information and Broadcasting (MIB) after being lenient for couple of months in awarding channel licenses, is back to being strict. In the month of October, two new channels received licenses while none saw their licenses cancelled as on 31 October 2018.

Regulators I&B Ministry
TRAI, telco chiefs to meet in December over OTT regulation

The Telecom Regulatory Authority of India (TRAI) is scheduled to meet top executives of telcos in the month of December.

Regulators TRAI
SC upholds TRAI Act over Copyright Act in tariff order case

The two-judge bench of the apex court with Justices Rohinton Fali Nariman and Navin Sinha dismissed the Star India’s appeal against Telecom Regulatory Authority of India’s (TRAI) recent tariff order. The principal area of the argument by the broadcaster was that the pricing of the content cannot be...

Regulators Supreme Court
AIDCF welcomes Supreme Court judgement which upholds TRAI jurisdiction

In the matter of the new Tariff Order and Interconnection Regulations as notified by TRAI in March 2017, the Supreme Court has today upheld the jurisdiction of TRAI to frame the above mentioned regulations.

Regulators TRAI
TRAI wins tariff order case in Supreme Court

The Telecom Regulatory Authority of India has come on tops in the long running battle between it and broadcaster, cable, DTH operators on whether it has pricing of content comes under its purview. The Supreme Court has finally given the long-awaiting verdict on Star India versus Telecom Regulatory...

Regulators TRAI
MIB proposes to change mandatory sports feed sharing norms

In what could have far reaching effects on the financial viability of sports TV channels or streaming platforms, which acquire exlcusive rights for sporting events for the India region spending billions of dollars.

Regulators I&B Ministry
TDSAT asks SPN, Tata Sky to reach an agreement in 4 weeks

The Telecom Disputes Settlement Appellate Tribunal (TDSAT) has heard the case on the recent commercial dispute between Sony Pictures Networks India (SPN) and Tata Sky on a failed negotiation. TDSAT heard the case on 11 October and advised the parties to take four weeks to try and reach a mutually...

Regulators TDSAT

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories