• Pearson and Bertelsmann join hands to create publishing behemoth

    Submitted by ITV Production on Oct 30
    indiantelevision.com Team

    MUMBAI: Britian‘s Pearson and Germany‘s Bertelsmann, two world‘s leading publishers, have collaborated to create the world‘s leading consumer publishing organisation by combining Penguin and Random House. The collaboration comes at a time when the publishing industry is facing stiff competition from e-book publishers like Amazon and Apple.

    Under the terms of the agreement, Penguin and Random House will combine their businesses in a newly-created joint venture named Penguin Random House. Bertelsmann will own 53 per cent of the joint venture and Pearson will own 47 per cent. The joint venture will exclude Bertelsmann‘s trade publishing business in Germany and Pearson will retain rights to use the Penguin brand in education markets worldwide.

    The agreement comes in the wake of Rupert Murdoch‘s News Corp showing interest in acquiring Pearson which together with Harper Collins publishing unit would have helped the media conglomerate in expanding its publishing business.

    Bertelsmann will nominate five directors to the Board of Penguin Random House and Pearson will nominate four. John Makinson, currently chairman and chief executive of Penguin, will be chairman of Penguin Random House and Markus Dohle, currently chief executive of Random House, will be its chief executive.

    In reviewing the long-term trends and considerable change affecting the consumer publishing industry, Pearson and Bertelsmann both concluded that the publishing and commercial success of Penguin and Random House can best be sustained and enhanced through a partnership with another major international publishing house.

    They believe that the combined organisation will have a stronger platform and greater resources to invest in rich content, new digital publishing models and high-growth emerging markets. The organisation will generate synergies from shared resources such as warehousing, distribution, printing and central functions.

    Pearson and Bertelsmann intend that the combined organisation‘s level of organic investment in authors and new product models will exceed the total investment of Penguin and Random House as independent publishing houses.

    The two companies believe that the combination will create a highly successful new organisation, both creatively and commercially, with the breadth and investment capacity to deliver significant benefits. Readers will have access to a wider and more diverse range of frontlist and backlist content in multiple print and digital formats. Authors will gain a greater depth and breadth of service, from traditional frontlist publishing to innovative self-publishing, on a global basis.

    Employees of the new organisation will be part of the world‘s first truly global consumer publishing company, committed to sustained editorial excellence and long-term investment in a rich diversity of content. And shareholders will benefit from participating in the consolidation of the consumer publishing industry without having to deploy additional capital.

    The combination is subject to customary regulatory and other approvals, including merger control clearances, and is expected to complete in the second half of 2013.

    In 2011, Random House reported revenues of ?1.7 billion (?1.48 bn) and operating profit of ?185 million (?161m). Penguin reported revenues of ?1.0 billion and operating profit of ?111 million with total assets of ?1.0 billion. After completion, Pearson will report its 47 per cent share of profit after tax from the joint venture as an associate in its consolidated income statement.

    Under the terms of the agreement, neither Pearson nor Bertelsmann may sell any part of their shareholding in Penguin Random House for three years. To protect Pearson‘s interests as a minority shareholder, if Bertelsmann declines a Pearson offer to sell its entire shareholding, Pearson may require a recapitalisation by which Penguin Random House raises debt of up to 3.5x EBITDA, with a dividend distributed to shareholders in line with their ownership. In addition, from five years after completion, either partner may require an IPO of Penguin Random House.

    Pengion Chairman and CEO John Makinson said, "All of us who work in book publishing experience every day the breathtaking pace of change in our industry. The partnership that we are announcing today will position Penguin Random House at the forefront of that change. Our access to investment resources will allow us to take risks with new authors, to defend our creative and editorial independence, to publish the broadest range of books on the planet, and to do it all with the attention to quality that has always characterised both our great companies."

    Random House Chairman & CEO Markus Dohle added, "Our new company will bring together the publishing expertise, experience, and skill sets of two of the world‘s most successful, enduring trade book publishers. In doing so, we will create a publishing home that gives employees, authors, agents, and booksellers access to unprecedented resources. I deeply believe that the support and services that we will be able to offer, coupled with the creative and editorial independence that we will continue to maintain, will benefit everyone in the book publishing environment, especially our passionate readers from today‘s generation to the next."

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    Rupert Murdoch
  • Murdoch in talks to buy LA Times and Chicago Tribune

    Submitted by ITV Production on Oct 20
    indiantelevision.com Team

    MUMBAI: News Corp Chairman and CEO Rupert Murdoch is eyeing Los Angeles Times and Chicago Tribune from its financially struggling owner Tribune Co to bolster his print business, which boasts of Wall Street Journal and the New York Post.

    The company wants to secure a foothold in Los Angeles and Chicago and is in early talks with Tribune Co debt holders which includes hedge fund Oaktree Capital.

    Murdoch is looking to buy the Los Angeles Times from struggling media conglomerate Tribune Co, whose books were recently examined by News Corp executives and Murdoch‘s son James Murdoch as part of due diligence process.

    However, Murdoch‘s plan to expand his newspaper business might face regulatory hurdles since News Corp also owns TV stations in both the markets. Federal Communications Commission rules prevent media ownership of a newspaper and TV station in the same market.

    Murdoch might also have to battle other potential bidders such as venture capitalist and ex-LA deputy mayor Austin Beutner, Orange County Register owner Aaron Kushnere, and San Diego real estate mogul Doug Manchester.

    The move is seen as a precursor to News Corp‘s decision to split the television and film business from the loss making print business. This coincides with Murdoch‘s forced retrenchment from part of the print business in the UK.

    The American print market has been battling declining circulation and advertising revenue since 2007 with ad revenue dropping almost 50 per cent to $24 billion, according to the Newspaper Association of America. But Murdoch sees promise in consolidating the market and also having an online extension of the print publications.

    In 2011, News Corp was ravaged by phone hacking scandal at its UK publishing business which led to the shutting down of News of the World newspaper.

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    Rupert Murdoch
  • Murdoch braves shareholders opposition to romp home

    Submitted by ITV Production on Oct 17
    indiantelevision.com Team

    MUMBAI: Rupert Murdoch has once again proved his critics wrong getting re-elected as the chairman and chief executive officer of News Corporation at the company‘s annual general meeting in Los Angeles Tuesday.

    Murdoch overcame opposition from shareholders who were hell bent on cutting him and his members to size by getting both his sons - Lachlan and James Murdoch - re-elected. Shareholders also re-elected the rest of the company‘s returning board members even as angry shareholders criticised Murdoch and the control that he wields on the company.

    The Murdochs have been going through the worst phase of their lives ever since the phone hacking scandal broke out at its UK publishing business News International which led to the closure of News of the World and arrest of employees.

    The scandal also led to a huge furore in UK and subsequently US about the company‘s corporate governance structure. It also diluted the power that Murdoch once wielded in UK and exposed them to tough action from UK authorities.

    While only five per cent of investors voted against re-electing Murdoch during this year‘s meeting which is in sharp contrast to last year‘s when 16 per cent shareholders had voted against his re-election. But last years AGM was held at the height of phone hacking scandal which subsided with the Ofcom giving clean to News Corp‘s broadcast business BSkyB.

    However the sons were not as lucky as their father with 17 per cent shareholders voting against James and 21 per cent against Lachlan.

    It is News Corps dual class shareholding that helped Murdoch to sail through amidst opposition from powerful pension fund outfits that wanted to curtail the power of Murdoch family and separation of chairman and CEO‘s post.

    The Murdoch family holds 12 per cent but its dual class shareholding structure gives it 40 per cent of the voting power. Add to that the backing of second largest investor Prince Al-Waleed bin Talal, who holds seven per cent in the media conglomerate. The dual structure gives Prince Al-Waleed almost 20 per cent voting power.

    Meanwhile, 28 per cent shareholders voted in support of eliminating the division between voting and non-voting shares.

    During his AGM speech Murdoch asserted that the media conglomerate has strengthened its corporate governance across the globe with modernisation of compliance across the board.

    The company has appointed Gerson Zweifach as Chief Compliance Officer and compliance structure has been divided into five groups to cover all the regions.

    "We have acknowledged the serious wrongdoing that occurred at some of our publications in the United Kingdom. As a result, we have had to work hard to make amends. But just as important, we seized the moment as an opportunity to strengthen our governance and our organization in key ways.

    "Under the guidance of our general counsel Gerson Zweifach -- who now also serves as our Chief Compliance Officer -- we‘ve modernized our entire system of compliance from top to bottom.

    "We‘ve organized this new global structure into five compliance groups that together cover every region where we operate and every business within it.

    "We‘ve imposed strict, uniform policies with centralized oversight. We‘ve improved employee training. We‘ve also imposed more auditing and testing, so that we can fix any problem by identifying it early. And we‘ve backed it all up by appointing top-notch professionals who have a track record that cannot be questioned-- including a former director of enforcement for the U.S. Securities and Exchange Commission and a former U.S. federal prosecutor."

    He also said that there will be special emphasis on UK since the phone hacking scandal took part in that market. He also claimed that the company‘s other publications did not not any sort of wrongdoing.

    "Because these problems were based in the United Kingdom, we‘ve put a special emphasis on our operations there. As you might expect, this has meant especially rigorous internal reviews. And we have confirmed that the problems in the United Kingdom were not found at our other publications.

    "Our findings were born out by the recent, in-depth report by Ofcom, the United Kingdon‘s independent media regulator. After looking at the evidence related to phone hacking, Ofcom found no basis for concluding that News Corporation acted inappropriately in any way."

    Murdoch also acknowledged that the company is going through one of the worst period in its history. He also said that despite all the problems that inflicted the company it has continue to grow.

    "This has been a difficult period in our company‘s 50-year history. However, I believe the numbers will bear out that the market likes the work we are doing and has confidence in our future. Since addressing shareholders a year ago, our stock price has risen nearly 45 per cent," he added.

    And to take this growth to the next level the company is being split into two separate trading companies which will also help it unlock more value for its media and entertainment unit.

    "Let me conclude with what you know is our biggest potential change and opportunity in the coming year: the transformation of one of the world‘s most successful media companies into two separate, publicly-traded companies. One will be focused on news, publishing and education. The other will focus on media and entertainment.

    "We are pursuing this for a simple reason. Notwithstanding our success, our company is undervalued. With this separation, we will free up each company to better deliver on its promises to customers across the globe. As we do, it will also mean unlocking more value for our shareholders.

    "As we head into this future, the company you know will be replaced by two dynamic new ones with separate names and different missions. But they will be driven by the same ethos of creativity, competition and entrepreneurship that has always been at the heart of our efforts.

    "This split will take time, but it is my expectation that by the end of the calendar year, we will be ready to announce more details about the executive management structures and Board memberships. I am deeply excited and energised by this future, and I hope you are as well."

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    Rupert Murdoch
  • Murdoch faces shareholders heat ahead of AGM

    Submitted by ITV Production on Oct 16
    indiantelevision.com Team

    MUMBAI: News Corp chief Rupert Murdoch is in the line of fire ahead of the company‘s 16 October annual general meeting with the Florida State Board of Administration (FSBA) voting to remove Murdoch and his sons James and Lachlan Murdoch from the News Corp board.

    According to Daily Telegraph, FSBA with assets worth $150 billion under its control has backed calls for an independent chairman to be appointed, and voted for the abolition of News Corp?s dual-class share structure, which hands the Murdochs a disproportionate amount of power.

    FSBA is the latest among the list of powerful pension funds to have called for Murdoch‘s head. The funds believe that Murdoch has compromised on the corporate governance.

    Earlier, California Public Employees? Retirement System (Calpers) and the California State Teachers? Retirement System (Calstrs), the two largest pension funds in America with combined assets of nearly $400 billion, have voted him out. The Calpers and Calstrs had also called on News Corp to split the roles of chairman and chief executive.

    However, Murdoch is unperturbed by these developments. ?Any shareholders with complaint should take profits and sell!? the unabashed Murdoch had posted on his Twitter account.

    Murdoch is banking on arithmetics to sail through the current crisis. The Murdoch family holds 12 per cent but its dual class shareholding structure gives it 40 per cent of the voting power.

    Add to that the backing of second largest investor Prince Al-Waleed bin Talal, who holds seven per cent in the media conglomerate. The dual structure gives Prince Al-Waleed almost 20 per cent voting power.

    With 60 per cent voting power in its kitty, the Murdoch family has the ability to push through their decisions and at the same time stall decisions that might not be in their interest.

    And much to Murdoch‘s relief, ISS, the influential US shareholder advisory body, has thrown its weight behind Murdoch after calling for his removal from News Corp at the height of phone hacking scandal.

    A year ago ISS wanted no less than 13 of the 15 directors to be rejected. However in an about turn, it has thrown its weight behind all the directors.

    Talking of phone hacking, former News International CEO Rebekah Brooks was reportedly given a payout package worth about ?7 million pounds after stepping down following the phone hacking scandal.

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    Rupert Murdoch
  • Rupert Murdoch gets backing for re-election

    Submitted by ITV Production on Oct 06
    indiantelevision.com Team

    MUMBAI: Rupert Murdoch has got a major backing from shareholder advisory group ISS, as it recommended that shareholders vote to re-elect News Corp‘s board of directors at its annual meeting on 16 October.

    The move is a reversal for ISS ? Institutional Shareholder Services ? one of the most influential shareholder advisory firms in the US, which last year was highly critical of News Corporation in its advice to investors ahead of the company‘s annual meeting, according to a report by The Guardian.

    The support comes after a number of investors and advisory firms joined an action on Wednesday launched by dissident shareholders seeking to break Murdoch control of News Corp. The campaign includes Hermes, a British fund manager that controls ?2.4bn in assets, and Glass Lewis, which advises institutions holding $15tn (?9.6tn) worth of investments. Glass Lewis took the same stance in 2011.

    Murdoch and his family own about 12 per cent of News Corp but control 40 per cent of its voting rights.

    Glass Lewis has insisted on shareholders? vote for appointment of an independent chair.

    Hermes global head of corporate engagement Hans Hirt told The Guardian, "While we acknowledge the recent board changes made by the company, News Corp has still not sufficiently addressed the significant shareholder concerns about its board structure and corporate culture highlighted at last year‘s annual meeting. The time is right for the company to appoint an independent chair in order to rebuild trust, and ensure that the interests of all investors are more properly represented."

    According to The Guardian, the ISS report said shareholders should vote for the current directors and expect to see independent action from the board to address any findings, allegations or penalties against the company when the phone hacking investigations conclude.

    ISS, which advises more than 1,700 clients on corporate governance issues, said last year the phone-hacking revelations at News of the World exposed a "striking lack of stewardship" and it called on shareholders to vote against the re-election of nearly all of the media group‘s board, including Rupert Murdoch and his sons James and Lachlan.

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    Rupert Murdoch
  • Chronology of Zee's 20-year journey

    Submitted by ITV Production on Oct 02
    indiantelevision.com Team

    1992: Birth of an Indian broadcast company

    Subhash Chandra Goel, a rice trader from Hisar, launches private satellite channel Zee TV on 1 October 1992 by leasing out transponder on AsiaSat owned by Hong Kong billionaire Richard Li‘s Star TV.

    The company was originally incorporated as Empire Holdings Ltd on 25 November,1982 which was later changed to Zee Telefilms Limited with effect from 8 September, 1992 following its entry into the business of entertainment software.

    1993:  Zee goes public

    Zee Telefilms files for an IPO in September 1993, wherein 8.2 million equity shares of 10 each were offered to the public at a premium of 20 per share. The Company was listed on Bombay Stock Exchange (BSE) on 25 November, 1993 becoming the first listed media company in the country. The move marked the beginning of Zee‘s transformation into an integrated media company with satellite broadcasting, cable and direct-to-home besides print and new media.

    1994: Ventures into music and education

    Zee Records, the music-publishing arm of Zee, commences operations. The company also forays into education sector with the launch of Zee Education as a division of the company.

    1995: The year of Big Bang expansion

    Entry into cable distribution

    Zee ventures into cable distribution with wholly-owned subsidiary Siticable Networks which commenced operations as an MSO in Delhi. The year also sees the biggest ever tie-up in the Indian broadcast industry with media baron Rupert Murdoch‘s News Corp buying 50 per cent stake into Siticable.

    Channel launches

    The company launches two more channels - Hindi news channel Zee News and Hindi movie channel Zee Cinema.

    International debut

    Zee TV goes global with launch in United Kingdon to tap into the Indian diaspora

    1996:  African safari

    Zee TV launched in Africa on MultiChoice digital platform

    First cable channel

    Siti Channel launches as the first cable channel in India relaying movies and local content.

    1997:  Music channel launch

    Music Asia launched later rebranded as Zee Music and is known as Zing in its present avataar.

    1998: America calling

    Zee TV USA launched offering cricket and Bollywood films to the large Indian dispora in that country. Zee Cine Awards dedicated to award excellence in the Hindi film industry instituted.

    1999:  Divorce with News Corp and regional foray

    The four-year-old partnership with Rupert Murdoch breaks as Zee buys News Corps 50 per cent stake in Asia Today, Siticable and Programme Asia Trading Company.

    Launch of regional channels

    The company announced its entry into the vast regional market with the launch of four umbrella channels under the umbrella brand of Alpha, namely Alpha Marathi, Alpha Bangla, Alpha Punjabi and Alpha Gujarato.

    The company also launches English entertainment channels to broaden its product offering. Zee English and Zee Movies launched.

    During the year, the education division of the company was demerged and transferred to a separate subsidiary company namely, Zee Interactive Learning Systems Ltd.

    In September 1999, the company acquired Zee Multimedia Worldwide thereby bringing the international operations including the broadcasting business of ZMWL under the company‘s control.

    2000:  Asian expansion and distribution ventures with Viacom and MGM
    Launches Internet over Cable services - Becomes first cable company in India to do so. Enters into content distribution joint ventures with MGM and Viacom and launches pay bouquet of channels in the Asian region.

    2001:  Experiment with film production
    The company enters film production with Gadar: Ek Prem Katha by funding the film produced by old Zee hand Nitin Keni. The film went on to shatter box office records by becoming the highest grosser film of its time.

    2002:  ETC acquisition

    The company got a foothold into Punjabi language market with the acquisition of a controlling stake in ETC Networks Ltd, a company engaged in production, marketing and distribution of two television channels with a leading presence in Music and Punjabi language segment.

    2003:  Launch of niche channels

    Launches five new channels for the DTH market viz. Action cinema, Classic cinema, MX, Premier cinema and Smile TV. Launches a premium fashion and style channel Trendz targeted at the fashion conscious Indian consumer.

    Enters into a distribution tie-up with Rajshri Pictures for theatrical distribution of films in India.

    2004:  Direct-to-Home entry

    Dish TV, India‘s first direct-to-home platform launched

    2005: Zee pads up, gets into sports broadcasting

    Zee Sports launched to provide a multi-genre sports entertainment package to the viewers

    2006: Zee Telefilms demerged

    Zee demerges cable distribution and regional channels by creating two new entities Siti Cable and Zee News Limited.

    In November 2006, Zee Sports International Ltd, Mauritius, acquired 50 per cent stake in Dubai-based Taj TV Ltd, Mauritius, which owned ‘Ten Sports‘ channel. Also, the company acquired 50 per cent stake with majority representation in the board in Taj Television India Pvt Ltd, Mumbai which is the distribution arm of Ten Sports in India.

    2007:  Change in corporate identity and launch of ICL

    Zee Telefilms renamed as Zee Entertainment Enterprises Limited (Zeel).

    Peeved by the Board of Control for Cricket in India‘s high handedness while awarding broadcast rights for cricket, Chandra cocks a snook by launching Indian Cricket League thereby forcing the BCCI to come out with its own T20 league, the Indian Premier League.

    2010:  Ups stake in Taj TV

    Zee takes full control of Taj TV by acquiring 45 per cent stake in the company and taking its holding to 95 per cent
    Launches Ten Cricket - a dedicated 24-hour Cricket Channel, Ten Action+ - sports channel showcasing the best football action from around the world

    Launches India.com - Joint Venture between Zee Entertainment Enterprises Ltd. and Mail.com Media Corporation

    Launches Zee Khana Khazana ? India‘s first 24-hour food channel and Zee Salaam - India‘s first Urdu infotainment satellite television channel

    2011:  Distribution JV with Star

    In order to plug the massive leakage of revenues in distribution, Zee joins hands with Star India to launch Media Pro, a 50/50 JV.

    2012: First Over-the-Top platform
    Launches Ditto TV - India‘s first and only OTT (Over-The-Top TV) Distribution Platform. Launches Ten Golf ? India‘s first and exclusive 24 hour Golf channel

    Image
    Subhash Chandra Goel
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