Murdoch set to exit TV news biz in India

MUMBAI: Rupert Murdoch is set to exit the television news business in India. Star India will sell its entire 26 per cent stake in Media Content & Communications Services (MCCS), the company that owns and operates three news channels, as it shares a rocky relationship with joint venture partner Ananda Bazaar Patrika (ABP) Group.

Star will not look at any other Indian partner including NDTV till the regulatory climate allows for more foreign direct investment (FDI) into the news sector.

"Star and ABP could split in June-July if matters are thrashed out by then as the relationship between the two partners has turned sour. It looks like ABP Group, which has 74 per cent holding in MCCS, will buy out Star’s stake," a source familiar with the development said.

Star India CEO Uday Shankar refused to comment on the issue.

The divorce will mean that the ‘Star‘ logo will be taken out of the Hindi, Bengali and Marathi news channels. ABP is likely to retain the Ananda brand in Bengali while the Marathi channel may continue with the Majha title. Star News, the flagship Hindi news channel of the JV, will have to be entirely renamed, though the buzz is that the Ananda brand may run common across the channels.

Star News was launched in March 2004, a year after MCCS was formed, followed by Star Ananda (Bengali) in June 2005 and Star Majha (Marathi) in June 2007.

The first strains came to public notice when ABP Group launched a Bengali general entertainment channel in July 2011 to compete against Star Jalsha (launched in September 2008). The JV partners have also been fighting over editorial and strategic issues.

"Star had no control over the running of the organisation. It makes no sense for them to continue with the JV. It is a matter of time but not clear yet whether there will be a slightly longer cooling period," said the source.

Star has an ad sales and distribution arrangement with NDTV, which competes in the Hindi space with Star News. "The cracks widened when Star inked a pact with NDTV to handle its ad sales in April 2011. MCCS is in charge of ad sales for its own channels," the source averred. In 2010, NDTV shifted its distribution from TheOneAlliance to Star Den, a JV between Star and Den.

So is Star going to pick up equity in NDTV or is "the man who owns the news" going to give up TV news in India? "Star feels that the whole economics of the TV news business in India is not working. You either invest in any business with the hope of making money in future or you look at it as a strategic value. If you are not in the driver‘s seat or have no significant say in the running of the operations, it doesn’t make strategic sense at all," a source said.

NDTV was earlier the sole news content provider and producer for Star News till Dr Prannoy Roy launched his own news channels in 2003.

MCCS has operationally broken even since FY’11, from its loss of around Rs 60 million in the earlier year on a revenue of Rs 2.13 billion, according to market estimates. The FY’09 loss is estimated to have been Rs 460 million on a revenue of Rs 1.81 billion. The cumulative loss stood at around Rs 2.6 billion till FY’10, estimates suggest.

In an emailed reply, MCCS CEO Ashok Venkatramani said, "We are a closely held private Ltd company and our financials are not in the public domain. So I would not like to respond to any of your questions."

Market sources say MCCS’ revenue has touched Rs 2.6 billion and it is an operationally profitable company now.

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