MUMBAI: Sahara supremo Subroto Roy is looking at restructuring his loss-making news channel business and has asked for suggestions from consulting firm Ernst & Young.
Sahara's bouquet of six news channels are sinking in losses of around Rs 1 billion a year, a source close to the company says. "Ernst & Young has been appointed to come up with recommendations for restructuring the operations. There is no mandate to find an investor. Clearly, the whole exercise is to make the venture profitable," he adds.
The Hindi news space is dominated by four channels (Aaj Tak, Star News, NDTV India and Zee News) which together garner close to 70 per cent market share in viewership, making the fragmentation at the lower end among several players tough for Sahara Samay Rashtriya.
And it is not just the national news but also the region and city-specific channels (Sahara Samay Mumbai, Sahara Samay Bihar & Jharkhand, Sahara Samay Madhya Pradesh & Chattisgarh, and Sahara Samay Uttar Pradesh & Uttranchal and Sahara Samay NCR) that are struggling to stay profitable.
According to the source, Ernst & Young has recommended a revamp of the business in the areas of operations, ad sales and content. Each channel should have a business head whose role should be properly defined, the consulting firm has suggested. The operations should also be streamlined and structured for more efficient running.
Under the existing structure, each of the six channels has an ad sales head who reports to a three-member core committee. Since mid-2006 Sahara has done away with a national ad sales head. The distribution team also reports to this committee.
"Ernst & Young has made a presentation of its recommendations recently. It has not yet been decided what Sahara would adopt," the source says.
Earlier, Ernst & Young had submitted a valuation report on Sahara One Media & Entertainment Ltd, the company that runs the Hindi general entertainment channel Sahara One and the motion pictures business. Later in April 2006, NRI businessman C Sivasankaran acquired 14.98 per cent stake in the company for Rs 1.2 billion.
