Mukesh Ambani to unveil mega media restructuring, all cos to get merged into Network 18
MUMBAI: After streamlining its various digital and online properties, Reliance Industries is restructuring its sprawling media opereations by merging three group entities --- Television 18 Broadcast Ltd, Hathway Cable and Datacom Limited and Den Networks -- with flagship Network 18 Media and Investments, people aware of the development said.
The restructuring will create a mega diversified media entity with interests in news, entertainment, internet, ISP and cable businesses that can compete with Zee Group, Bennett Coleman and Co Ltd, the publishers of The Economic Times, Sun Tv Networks, Sony among others.
The boards of these companies met on Monday to clear the proposal, added the people mentioned above.
Reliance Spokesperson was not immediately available for comment.
Network 18 has a large bouquet of channels (55 domestic channels and 16 international beams), and a substantial digital presence along with upcoming OTT platforms.
Network 18 is 75% owned by Independent Media Trust whose sole beneficiary is RIL. Network 18 owns 51% TV 18 which in turn owns 51% in both Viacom 18 ( a JV with Viacom) and AETN ( its JV with A+E Networks). Network 18% also owns around 92% in Moneycontrol and around 39% in ticketing company Book My Show. Network 18 owns a portfolio of digital properties too -- Firstpost, Moneycontrol and print and digital magazines like Forbes and Overdrive in India.
TV18 Group is the third largest national broadcast group in the country after Star, Zee and Sony.
The group reaches over 800 million people, across news, entertainment and infotainment, as per the company presentation with channels like CNBC TV18, CNN-IBN, the IBN regional channels across 14 languages. In owns and controls 20 news channels in 15 languages.
It also houses the entertainment channels that are housed under the Viacom 18 JV including Colors, MTV, Voot, Nickelodeon among others. TV18 and Viacom 18 are also equal JV partners in a distribution venture called Indiacast.
Sony is currently engaged in negotiating with Reliance Group to merge their entertainment businesses to create a larger general entertainment company. Those discussions are independent of Monday's restructuring, said the sources mentioned above.
In FY19, Network18 and affiliates had a 13.4% share of India's TV viewership with a total of 55 channels. Total channels - 71. For FY19, Network18's consolidated operating revenue stood at Rs 5,116.18 crore, and EBITDA was at Rs 212 crore. The company posted a post-tax loss of Rs 178 crore.
TV18, on the other hand, posted a revenue of Rs 4,943 crore, EBITDA of Rs 314 crore and net profit of Rs 210 crore for FY19.
The current market capitalisation of Network 18 is Rs 2,999.51 crore while that for TV 18 is Rs 4,311.62 crore as on Monday. Hathway's market capitalisation end of Monday trading session stood at Rs 3407.45 crore and Den's Rs 2581.78 crore.
ICICI Securities and Citi are believed to have been the advisors in this trasnaction.
Mukesh Ambani's ambitions in media started to take shape in 2012 when he first acquired Raghav Bahl's Network18 and TV18. Later, in 2013 it renamed Infotel Broadband Services, which owned 4G spectrum, as Reliance Jio Infocomm to launch wireless service.
In the recent times, RIL has acquired music streaming service Saavn, 25% stake in Balaji Telefilms and 5% stake in Eros International's NYSE-listed parent company.
RIL's initial plan was to provide all the options in-house and thus own a larger share of consumer's wallet. Read newspaper or magazines on Jio app, watch video and films on Jio TV/Jio Play/ Voot via JioGigaFibre, and while on-the-go listen to music on Jio Music/Saavn.
In October 2018 - RIL announced investment of $1 billion to acquire majority stake in Hathway and DEN.
Reliance through its network of subsidiaries had acquired 58.92 per cent in Den networks and 51.34 per cent in Hathway Cable and Datacom Limited. Hathway gthen enjoyed over 52 per cent share of the total MSO cable broadband market in India with 7.7 lakh subscribers, and had the ability to reach 5.5 million homes, the company had said at that point. A per TRAI, Hathway cable and datacom has 3.58 per cent market share in the wired internet subscriber category. DEN, on the other hand, claimed to have the ability to reach 9.7 lakh homes but had around 106,000 broadband subscribers. Hathway Cable was owned by the Raheja Group, while Sameer Manchanda owned DEN Networks. They both are amongst the biggest players in the cable broadband market.
Since last year, both the companies have rode piggyback since Reliance Industries unveiled plans to launch high-speed internet services in India, in tie-up with Microsoft. Currently their footprint covers over 20 million homes across 750 cities.
"The group is trying to streamline its various businesses to help unlock value. We have seen telecom, petroleum and retail also getting restructured with an aim to simplify corporate holdings,"said an old Reliance Group watcher. "It is also proctively seeking investors across businesses as it is looking to bring its net debt to zero."
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