2019: Media and entertainment deals that did not happen

Premature newsbreaks kept us all guessing about Zeel, Airtel-Dish and Sony-TV18.


MUMBAI: Can the mainstream media get it right?

That’s a question we, at indiantelevision.com, asked through the year. 

Canards, canards, canards, and more canards are what we read in the mainline dailies.

Of course, it cut across politics, business, lifestyle, and what have you. But the business press got it so wrong time and again through the year.

Journalists wanting to scoop each other came out first with a piece of news about a development, which was still to be born.  They were doing their jobs, and hence it made for interesting updates and information. But mostly it made for great merriment, gossip and entertainment. And of course, it impacted the price of the stock on the exchanges.

We waited expectantly for the development to become a reality, but after promising time and again, it did not. It was a guessing game through the year: “It’s happening; it’s not. It’s happening, no, it’s not.”

Zee Entertainment Enterprises Ltd (Zeel) was in the spotlight for much of the year . Talks were on between various interested suitors as the Zee promoters worked hard, looked high and low to get out of the tight spot they found themselves in. Their stake in Zeel had been pledged with institutions for funding to diversify and invest in infrastructure and grow as a group. The investment went sour as the infrastructure sector fell into a downward spiral.  And lenders wanted the money back or they would sell the pledged shares, was the fear. The Zeel promoters had a specific time to find alternative partners to bail them out, and  the amount was a hefty Rs 12,000 crore.

Reports appeared that the Zee had cut a deal with Comcast; it was done or would be done soon, went the press.

Then news reportedly surfaced that Sony Pictures Networks too had thrown its hat into the ring. A binding offer being received by Zeel from Comcast- Altairos-Lupa Systems was another story that broke; Zee spokespersons denied this was true in the same report.

Following that with no deal falling in place the newspapers positioned the family as helpless and lost, with investors getting impatient and possibly offloading their equity. Finally, the biz press also said that the Subash Chandra family would be evicted as they would be left with a minority position in the company as investors were not happy at all with the tardiness of the family’s search for money from potential partners. One report said Chandra had left the country – a laughable proposition, knowing the man. Chandra is known to face the bullets and pay the price, no matter what and how much.

Fast forward to the end of 2019  and none of the predictions came to pass.  

Instead what happened was that the existing investors in Zeel stepped in to lend the family cash so that they could pay off their creditors and free themselves to focus on the business. The Zeel board then re-elected Punit Goenka as CEO for the next five years. Yes, some independent directors did resign, as did Subhash Chandra as chairman. The latter action was one of the more graceful ones we have seen in corporate India where promoters have stayed stuck to their seats after running their banks and firms to the ground, refusing to go, no matter what the opposition from the board or lenders of institutions. Here, Chandra’s act was voluntary, hence it is worthy of praise.

But the investors showed faith and confidence in the family by putting down cash on the table and re-electing Punit. Sources, of course, indicate that Chandra though not holding the title of chairperson is still helping in giving direction to the top management at the company from the outside.

For patriots who want businesses to be controlled by Indians, it was a happy turn of events. It meant that there is a great chance of the family fighting back and possibly over time getting back majority control.  

Development No 2:

Airtel is buying Dish TV India to create the world’s largest satellite company with about 39 million subscribers. These headlines ran in the biz press on more than two occasions.  On the first occasion, it said that talks died down because the Goyal family was not happy with the valuation that was being talked about: Rs 30-Rs 35 a share as against the expected Rs 45 or so the reports said.

Earlier the same media had praised the acquisition of Videocond2h by Dish TV and soon after they were lambasting the deal.  Nonetheless, the M&A  buzz started again soon  Zeel promoters made their announcement that existing investors were helping the company in their times of difficulty.

Of course, nothing of that sort developed even as Christmas was ending. Jawahar Goel the big boss of Dish TV India got re-elected as chairperson of Dish TV.

Both Airtel and Dish TV had to issue notices to the exchanges that both companies continue to explore options for their business without confirming or denying whether a deal had been structured or was in the works.

Observers believe it may never materialise. But we don’t want to add to the speculation that we are accusing the mainstream media of.

Development No 3:

Sony is merging its India entertainment operations with Mukesh Ambani’s TV18 ran the masthead in some publications to create a new entity.  They even detailed the deal structure: sony would keep 51 per cent of the new entity, Viacom 24 per cent and the Reliance group 25 per cent. It would be an all-stock deal, said the articles.  And the deal would be announced by 9 December when the senior management was scheduled to visit Mumbai’s famed Antilla home of Mukesh Ambani. It almost seemed like the deal was a certainty. 9 December has come and gone. No announcement has come. We are not saying it may not be realised, but we have to understand that deal-making is not just a shoo-in. That two parties – in this case, three – will agree to terms by just a snap of their fingers. Deal-making takes presentation, search for partners,  negotiation and agreement and then closure.  All through the process, one has to keep a cast-iron stomach, a stony face; squeamishness can be a deal-breaker.

Who knows? 2020 may see the parleys between the three bearing fruit

But until the organisations come out clean and make an official announcement: the Sony Pictures and TV18 will be in the realm of fictional imagination.

Of course there were many other speculative stories that struck the media world wherein the hacks got it wrong. But these were some of the top highlight-able ones. Hope you had a good time reading them.

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