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Tag: Buddha Films

  • Zee to pump in Rs 2 billion into sports channel: Chandra

    Zee to pump in Rs 2 billion into sports channel: Chandra

    NEW DELHI: Zee Telefilms Ltd, which reported a 10.8 per cent growth in consolidated revenue for the quarter ended 30 June 2004, would be investing about Rs 2 billion in its proposed sports channel in the initial phase.

    Speaking to indiantelevision.com yesterday, Zee Telefilms CMD Subhash Chandra said, “Investments are an ongoing process. But we do plan to pump in between Rs 150 crore and Rs 200 crore (Rs 1.5 – Rs 2 billion) initially (in the proposed sports channel).”

    This is not the first time that Zee Tele has thrown its hat in the sports broadcasting arena. Some years back, a Zee affiliate, Buddha Films, had attempted to do a marketing tie-up with Indian pubcaster Doordarshan relating to cricket matches.

    Asked whether the sports channel would be in collaboration with Turner Broadcasting, a Time Warner group company, Chandra said those aspects would be “looked into now” after having finally acquired the telecast rights for Indian cricket for the next four years.

    Chandra believes he has got a good deal “Now that we have got the rights, we’ll start the process of setting up the sports channel. There is an offer from Turner, but we’ll have to look into some other aspects too before we make any announcements in this regard (relating to a possible joint venture),” said the maverick media baron, who is credited with changing the face of Indian television market by starting the country’s first Hindi language entertainment channel, delivered via satellite, over a decade back.

    Some time back, Turner Broadcasting Asia-Pacific had written a letter to Chandra, offering collaboration on a sports channel, the details of which are still not available with the media. At present, Turner International India and Zee Telefilms have a 26:74 distribution joint venture called Zee Turner Pvt Ltd.

    Wouldn’t it be logical for Zee Telefilms to extend the relationship with Turner with the sports channel and, in turn Time Warner, if it wishes to take on other global giants like News Corp (Star’s parent company) and Disney (ESPN’s owners)? “These are business decisions that have to be taken after considering various other aspects and cannot be disclosed to the media always,” Chandra said.

    Zee Telefilms has also mandated FCB-Ulka, an advertising agency, to undertake a public opinion poll on a suitable name for the proposed sports channel. “We’d have to see what the agency has to say on the name,” Chandra explained when asked what could be a likely name for the sports channel.

    Some of the options on the names that are available with Zee include the traditional Zee Sports and the trendy Sportz, may be with an emphasis on the alphabet `Z’ to denote its parentage.

    According to company sources, a final decision on the name is likely to be taken either later in the day or over the next few days after Chandra returns from Chennai. He had been camping there over the weekend to make forceful presentations to the BCCI, which ultimately swung a split verdict on the issue in the cricket board in Zee’s favour early Sunday afternoon.

    Chandra also maintained that Zee has managed to get the telecast rights at a good bargain at $ 308 million, plus another Rs 930 million committed for the development of domestic cricket in association with the Board of Control for Cricket in India (BCCI).

    “As a businessman, I do calculations. The percentage increase in the number of days of available cricket is 33, while our bid was hiked by about 20 per cent. So, in a way, we have managed to get a product worth Rs 33 at Rs 20,” Chandra, who was in a jovial mood, tried to explain the intricacies of bidding and winning.

    Experts seem to agree with the Zee Telefilms logic. According to conservative estimates from the Hong Kong-based research agency Media Partners Asia (MPA), Zee’s cricket coverage could potentially bring in revenues between $320 and $350 million over a four-year period against total cost estimate between $350 million and $375 million. MPA also estimates that net advertising revenues have the potential of touching approximately $160 million with distribution or subscription revenues at around $140 million, with 80 per cent generated from India.

    Short-term losses bit long-term gains? MPA analyst Vivek Couto grandly explains, “Did Subhash (Chandra) and Zee overbid? Who cares? In the Mogul-ish scheme of things when Ted Turner bid for the Atlanta Braves or when Rupert Murdoch outbid Barclay Knapp at NTL to win the English Premier League in 90s, sure the bids were inflated and early losses were sizeable. But long-term returns (both tangible and intangible) were there for the taking too.”

    Isn’t Subhash Chandra also sometimes referred to as the Asian Rupert Murdoch?

  • World cup rights turn out no sport for Zee; pull down Chandra’s stake to 47.6%

    MUMBAI: After its convergence adventure, Zee is cleaning up after its sports quest too. To pay off the dues of Zee and Essel Propack, Subhash Chandra and his family have offloaded around 3 per cent of their holdings in Zee Telefilms Ltd to a set of three Financial Institutional Investors (FIIs) for Rs 1550 million.
    Chandra had raised the Rs 1550 million as a loan from Zee Telefilms through a platform he had floated for acquiring sports property rights for launching a sports channel.
    Buddha Films, the platform company however lost out in its bidding for cricket world cup rights and lost around Rs 250 million on a Doordarshan marketing deal. Even the bank guarantee of Rs 675 million was encashed in December 2001. Although, these were business losses of Zee, the promoters have taken it on themselves. The sell off is to effect this dues settlement.
    The 12,375,000 shares placed with the three FIIs are understood to have fetched a market rate plus price of around Rs 125 a share. Though Chandra has not named any FIIs, one of the three reported to have picked up a stake is the US based Putnam Investments.
    With this sale, the personal holdings of Zee promoters have gone below 50 per cent for the first time. Their combined holdings after the sale are 47.6 per cent.
    Incidentally, Zee is also writing off its holdings, to the tune of Rs 614.5 million, in its wholly owned subsidiaries Econnect India Ltd (EIL) and Zee Interactive Learning Systems Ltd. (ZILS). This move comes in the wake of a major capital reduction in EIL and ZILS both of which have incurred heavy losses and are admitting a sweeping erosion of their net worth.

  • Zee expects subscription revenues to cushion ad sales fall; puts search for foreign partner for Siti Cable on hold

    Zee expects subscription revenues to cushion ad sales fall; puts search for foreign partner for Siti Cable on hold

    Zee Telefilms chairman Subhash Chandra today warned investors that the overall negative market scenario prevailing was going to impact on financials as companies cut back on advertising. It was also clarified later that efforts to bring on board an international player as strategic partner for its cable arm Siti Cable had been put on the cold burner for the present.

     

    Zee’s Nineteenth Annual General Meeting, which took place at the Nehru Auditorium in Worli in Central Mumbai today, started at 12 o’clock sharp with a short speech by Chandra. ‘There will be a dip in total revenues as well as net profit of the company as industry is going through a rough patch,” Chandra said. He later explained while answering shareholders’ questions that though overall growth would be there, the earlier rates of growth which had stood at 45 per cent and 60 per cent far the last few years would not happen.

     

    On the positive side he said there would be an increase in revenues of around 20 to 25 per cent from subscription during this financial year. The Zee bouquet having gone pay on 10 June this year had proved a success with higher than anticipated revenue collections.

     

    Chandra referred to the AT Kearney report which suggests that operations within the group be streamlined by merging the many companies under the Zee umbrella into fewer entities. Chandra said that the present 22 companies which make up the group would be reduced to 12 under three broad operations of access, content and education.

     

    As far as the education business was concerned the growth prospects were not that positive, he said.

    Seeking to reassure investors over Zee’s links to cornered bull operator Ketan Parekh and the subsequent fallout, he said that there was no investigation on against the company. Out of a total of Rs 2,200 million that was transferred from Zee Telefilms to investment companies of Chandra’s Essel group meant to help bail out Parekh, Rs 1300 million had already been paid and the remaining amount would be paid within a short period, he said. Chandra further clarified that henceforth, as a matter of company policy no Zee group company would have any financial transactions with Zee telefilms. In his speech, he also mentioned the tax liability of the company as a foreign broadcasting channel.

     

    “Also, the investment in Buddha Films which is Rs 102 Crores (Rs 1020 million) would be returned to Zee as part of divestment within this financial year along with interest of 15 per cent,” he said.

     

    Clarifying on some other investment issues raised by the shareholders, Chandra said that there was no investment in Agee Gold (there as an agreement between Zee and Agee Gold Refineries that Agee will use the Zee brand name for selling their products for which they will pay 20 per cent of their net profit as royalty). ‘There is also advertising tie-up under which they have to advertise on the network,” Chandra said.

     

    Replying to a question as to how far discussions to bring on board an international media player as a strategic partner had proceeded, Chandra said the search had been put on hold for the time being.

     

    However, RK Singh, corporate affairs CEO, Zee Telefilms, subsequently clarified that what Chandra meant to say was that the search for a strategic partner for group cable arm Siti Cable had been shelved.

     

    Chandra was reluctant to disclose the profits made on the recent mega hit Gadar. “Films are not new for us. Before Gadar happened, in the last seven years there were something like 12 films that we made which were low budget but all were cash positive,” he said. Talking about the future plans on the film front, he said this financial year Zee would doing one more film. The investment would be close to Rs 10 to 20 million and if further finances are required, the film will finance itself through the sale of various rights in advance as well as with the advertising partnerships.

     

    To one investor who raised the issue of the sharp increase in salary expenses, he explained that earlier there were only four channel while that number now stood at 13, which needs strong backend to support which adds to the cost. “But if you see the overall operating costs of the company you will see it is well under control,” he said.

     

    On the programming front he expressed optimism. “We have 32 per cent of overall eyeballs despite the fall in ratings. Our next rival has 20 per cent which is far behind,” Chandra said. The media and entertainment industry will grow at the rate of 30 per cent this year, he said.

     

    If one didn’t know better it could have seemed that all was well in the Zee camp. At least that was what could be made out purely going by the kind of feedback that investors offered at the AGM.

     

    The main concern among the shareholders present appeared to be to get some free screening of Zee’s mega hit film Gadar, a request that was partially accepted by the board. Most of the shareholders who spoke at the AGM started their speech with praises for Chandra and his caliber in having managed such fantastic results despite the bad market conditions.

     

    Some went so far as to say they wished Chandra would soon be on top of the heap as far as Indian billionaires were concerned.

  • Indo-Australia cricket series generated Rs 400 million in airtime sales

    Indo-Australia cricket series generated Rs 400 million in airtime sales

    The recently concluded cricket series between India and Australia generated Rs 400 million in airtime sales, Monica Shrivastav, in charge of airtime sales for Zee Telefilms, has said.

    Zee Group company Buddha Films had signed a four-year deal last year for airtime sales rights covering nine international cricket series to be played in India. Zee purchased the rights from national broadcaster Doordarshan for a whopping Rs 4,500 million.

    Coming up at the end of the year are two series which will feature England and Sri Lanka. If India’s cricketers can again perform the way they did in this series, Zee just may have reason not to right off its commitment to Doordarshan. There was talk at one stage of Zee pulling out which would have invited an immediate forfeiture of Rs 700 million as bank guarantee.

    Other news that should cheer Zee officials is Initiative Media president Ashish Bhasin’s observation that cricket viewership was 25 per cent more than even the most optimistic estimates at the start of the series.