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Tag: Punit Goenka

  • The whys and wherefores of the Zeel-SPNI merger proposal

    The whys and wherefores of the Zeel-SPNI merger proposal

    Mumbai: After days of conjectures fueled by boardroom battles, Zee Entertainment Enterprises Ltd (Zeel) pulled off a tour de force early on Wednesday announcing the company’s plans for a mega-merger with arch-rival Sony Pictures Networks India (SPNI). With their combined linear networks, digital assets, production operations, and programme libraries, the two companies are set to create one of India’s largest media and entertainment entities in terms of market share. It will not only rival market leader Disney Star India, but it could well pip the former at the post in revenues when it does go through.

    The news was not completely unexpected; talks of a merger between the two networks had been in the news intermittently for almost two years now. They had flirted with each other and other suitors intermittently. According to various media reports, both SPNI and Zeel had been on the lookout for a partner that could bring in mutual synergies, while minimising clashes, to fend off competition amid growing consolidation in the media and entertainment industry.  Each one of them had also explored a merger with the Mukesh Ambani-owned Viacom18 to challenge the Disney-Star collaboration that has been dominating the content market, however, without success. RIL owns a majority stake in Viacom18, which is a joint venture between TV18 Broadcast Ltd and US-based ViacomCBS Inc. With the current merger, the companies have seemed to found what each of them was looking for to turbocharge their future growth.

    If Zeel is backed by its core strength in content creation in both mainline Hindi and regional languages, SPNI brings along its well-consolidated entertainment and sports genre creating a potent combination. SPNI also leads in the English/premium factual entertainment genre, but in return, it will get an opportunity to leverage Zeel’s pervasive reach built over decades.

    Despite recent challenges, the network has come a long way since its launch three decades ago. Zeel continues to maintain its hold in the HSM with its FTA channel Zee Anmol being the steady top grosser in the UP/Uttarakhand market, and down south with regional GECs Zee Kannada or Telugu. The merger could also help SPNI to adopt a well-positioned strategy that has so far oscillated between targeting mass and metro audiences.  It could also bolster their growing digital businesses, bringing together the two streaming platforms-  Zee5 and SonyLIV. 

    The reality is that both Zeel and SPNI are no strangers when it comes to striking a deal. One can hark back to a time half a decade ago when the Subhash Chandra-run company had hawked off its Ten Sports channel and related sports business to SPNI – a deal which has served the latter well.

    With the latest merger announcement, Zeel has also pulled off a coup of sorts in favour of its MD and CEO Punit Goenka who will now lead the combined media entity. The announcement is crucial, as it boosts his position at a time when two of Zeel’s top investors – had called for his ouster, making corporate governance allegations against him and some Zeel board members.

    Over the last year, Goenka has focused on transforming the company into a new ‘Zee 4.0 vision’ – led by a revamped programming line-up of its linear channel portfolio in the key markets, and the launch of new channels. In its recent annual general meeting (AGM), Goenka had elaborated how Zeel’s future roadmap for the next three years will be led by digital. “We are still in investment mode for our digital business and our film business. We enjoyed leadership in several of the markets that we operate in,” he told shareholders last week.

    Zeel’s linear business has managed to retain its profitability, but its flagship channel Zee TV has been looking to regain its standing in the non-fiction content where it used to be a strong player until a few years back, with popular properties like Sa Re Ga Ma and DID.

    Goenka also told shareholders about Zeel’s plans to become the leading studio in films across six languages and increases its market share in the music category. SPNI, on its part, has recently stepped up its content creation capability in-house through its TV and OTT show and film production units. Zeel and SPNI’s union on this front will prove beneficial in many ways.

    The most important benefit that the merger brings to the table is even higher economies of scale. Zeel has over the years built its reputation as an excellent cost-efficient media company, even as SPNI is one of the more profitably run broadcasters. Their coming together is likely to bring in even more cost-efficiencies because of the scale that their marriage will usher in, enabling tougher negotiating power with suppliers and with clients. Additionally, internal cost savings will also be generated as the merged entity right sizes itself in terms of manpower, talent, and functions.

    The merger announced on Wednesday is subject to regulatory approvals, but once it goes through, it will result in SPNI holding a majority of 52.93 per cent with Zeel and its shareholders having 47.01 per cent of the new entity. But, the promoter family will remain free to increase its holding from four per cent to 20 per cent over time. SPNI will hold the majority share in the new media entity and its shareholders will pump in growth capital of $1.575 billion to strengthen the company’s digital platforms across technology and content, ability to bid for broadcasting rights in the fast-growing sports landscape and pursue other growth opportunities.

    The combined company’s board of directors would include directors nominated by the Sony Group and result in it having the right to nominate the majority of the members. 

  • RPG group chairman Harsh Goenka supports Zee TV’s Punit Goenka

    RPG group chairman Harsh Goenka supports Zee TV’s Punit Goenka

    MUMBAI: The media has been full of cacophonic noise about the boardroom battle that is going on at Zee Entertainment Enterprises. Some investor groups have lauded the initiative by two of the company’s two main investors to reconstitute the board and oust CEO & managing director Punit Goenka (who represents the promoter family being Subhash Chandra’s son) for failing to professionalise the management and enhancing the shareholder value.

    Institutional Investor Advisory Services founder Anil Singhvi is quite vociferous that Zee is one of the best Indian media companies but needs to be in the hands of a good professional CEO. Speaking to moneycontrol.com he said that the promoter family should also be happy about this. “They have a four per cent stake and already their value has gone up with the share price rising 25-30 per cent on the announcement by the two institutional investors to hold an EGM to move out Goenka and the resignation of the two directors,” he pointed out.

    However, smaller shareholders voiced their confidence in Punit’s ability to get Zee back as a stellar performer during the company’s AGM on 14 September where he explained the initiatives that were underway under his leadership. Punit also reiterated that there were no hidden or shady related third party transactions under his charge as is being alleged.

    There are many in the industry who point out that Punit has definitely brought In professionalism into the company by bringing in executives at the leadership level from companies such as Hindustan Lever, Future, BCCI, and Aditya Birla group and built a good management team.

    Among them is corporate leader Harsh Goenka (chairman of the $3.80 billion RPG group and no relation to Punit). Harsh has come out in support of Punit.

    Late in the evening of 15 September Harsh tweeted: “I just can’t understand why would a large investor try to destabilise a good leader, a good management team, which has a track record to show. If valid reasons were given, it’s different. A dangerous trend! #Zee.”

     

     

    Most of his followers on Twitter seconded his view, while the naysayers said the promoter family had it coming.

    The coming days will decide whether the street and Zee’s investors will have the last word. Or the promoter family.

  • CEO Punit Goenka bats for Zee 4.0 vision, as boardroom tussle rages on

    CEO Punit Goenka bats for Zee 4.0 vision, as boardroom tussle rages on

    New Delhi: Zee Entertainment Enterprises Ltd (ZEEL) is gearing up for a boardroom tussle with two of its big investors demanding the removal of its top management. Amid all this, CEO Punit Goenka took the stage at the company 39th Annual General Meeting (AGM) to address the shareholders and highlight the efforts taken by the management over the past year to transform the organisation into the Zee 4.0 version.

    “The last financial year has been a dynamic one for us, a year where we started afresh, starting a brand new chapter in our book,” said Goenka at the 39th AGM held on Tuesday.

    The meeting comes after two of the company’s top investors – Invesco Developing Markets Fund and OFI Global China Fund LLC – who together hold up to 18 percent of the stake demanded the removal of Punit Goenka, Manish Chokhani, and Ashok Kurien as directors in an Extraordinary General Meeting (EGM). Both Chokhani and Kurein submitted their resignations as non-executive non-independent directors of the firm ahead of the meeting.

    Discussing the year gone by, Goenka said the financial year 2021 was an unprecedented year on all counts. “There was a massive disruption in the first half, and ZEEL’s advertising revenues reduced by almost half,” he added as reported by moneycontrol.com. “There was a sharp rebound in the later part of the year, leading to a 6.8 percent growth in the second half. The subscription revenue saw comparable growth of 5.2 per cent during the year, primarily driven by sci fi.”

    Elaborating on the plans to transform the organisation, Goenka told the shareholders that the Zee team is working on revamping the programming line-ups of the linear channel portfolio to bounce back in the key markets, and expand the broadcast portfolio with the launch of two new channels during the year. 

    “The future roadmap for next three years is going to be driven through digital. The digital business has great promise for the future. It is growing multi-fold,” said Goenka talking about the renewed focus on the digital, with Zee5 scaling its content library and enhancing the customer experience.

    “We are still in investment mode for our digital business and our film business. We enjoyed leadership in several of the markets that we operate in.”

    However, in terms of verticals, he said, the linear business enjoys the maximum of popularity and profitability. “We also want to be the leading studio in films across six languages, and we will continue to increase our market share in the music category also,” he added.

    Responding to the shareholders’ concerns over the impact of the pandemic, ZEEL MD and CEO said Zee Studios bore the maximum brunt, due to the closure of malls and theaters across the country, and continues to face challenges. Zee Anmol also lost market share due to the lockdown restrictions. “The exceptional expenditure incurred in Q1 of FY22 was on account of relocation of shoots to alternate locations,” he added, noting that this will not be significantly higher in the coming quarters.

    On repayment of funds from related parties, Goenka said that there have been no loans given to related parties from the company. “There have been business revenues that we collect from related parties like Siti Cable and Dish TV and other parties and the board monitors these recoveries very closely and the management is engaged with related parties for recovery of our overdues, if any.”

  • Investors seek removal of Zee TV board directors

    Investors seek removal of Zee TV board directors

    Mumbai: Invesco Developing Markets Fund and OFI Global China Fund LLC, shareholders of Zee Entertainment Enterprises Ltd (ZEEL) have sought the removal of long-standing directors and close associates of the Chandra family from the Board.

    Both Invesco Developing Markets Fund (formerly Invesco Oppenheimer Developing Markets Fund) and OFI Global China Fund LLC hold equity shares, which represent an aggregate of 17.8 per cent of the paid-up share capital of the Company. The change of guard comes two years after Oppenheimer bought the mortgaged shares of banks when Chandra defaulted on loans from banks.

    In a special notice sent under Section 169(21 read with Section 115 of the Companies Act, 2013, the investors have sought the organisation of an Extraordinary General Meeting (EGM) of shareholders to remove Punit Goenka, Manish Chokhani, and Ashok Kurien as directors.

    Both Chokhani and Kurien have held the positions since Zee TV’s inception, and have resigned with immediate effect. While Kurein was a member of the CSR committee and Stakeholders committee of the Board, Chokhani was a member of the nomination and remuneration committee and risk management committee.

    The investors have also sought the appointment of Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli, Gaurav Mehta as independent directors on the board for a term of up to five consecutive years.

    “The board of directors of the Company is requested to take all necessary action to call for and conduct the extraordinary general meeting, as requisitioned by us, in accordance with applicable law, including Sections 100, 101, and 102 of the Companies Act, 2013 and Rule 23(3) of the Companies (Management and Administration) Rules, 2014,” the notice read.

    However, all the appointments are subject to the approval of the ministry of information and broadcasting (I&B).

  • ZEE ropes in Nitin Mittal as president – technology & data

    ZEE ropes in Nitin Mittal as president – technology & data

    Mumbai: Leading media conglomerate Zee Entertainment Enterprises Ltd. (ZEE) on Tuesday appointed Nitin Mittal as president – technology & data.

    Prior to joining ZEE, Mittal was the founder CEO & board member for SOLV, a company focused on creating an open platform for B2B commerce, credit, payment, logistics and skilled workforce for the SME segment in India. At Zee, he will lead strategic initiatives in Tech, Data, Artificial Intelligence (AI) & Machine Learning (ML) and Digital across the company to support the ZEE 4.0 transformation, said the company on Tuesday.

    The announcement is part of the media conglomerate’s strategic plans to support its digital pivot, drive exponential growth across digital platforms and fortify the broader transformation it has embarked on, in line with the ZEE 4.0 approach.

    “We have taken concerted efforts and reworked our digital strategy in order to build robust digital assets to enhance the user experience. We are taking concrete steps to further upgrade our technological capabilities, and I am sure with Nitin’s expertise, we will enhance the value proposition of our digital products to create consumer delight,” said ZEE Entertainment Enterprises Ltd, MD & CEO, Punit Goenka.

    The transformation process aims at creating a digitally adept, data first company that will be a leader, in all formats of content consumption, both linear and digital, across India and key international markets.

    Mittal will also lead the engineering team and work closely with president – digital businesses & platforms, Amit Goenka to enhance the customer experience across ZEE5 and support the growth plans of the OTT Platform in India and across the world.

    “The pace of technology-led innovation in the media and entertainment ecosystem is rapidly rising, and a strong blend of technology, data and talent are the critical determinants to succeed in this space. I am glad to welcome Nitin Mittal to our leadership team to drive the digital transformation journey of ZEE 4.0 forward,” said ZEE Entertainment Enterprises Ltd, president – digital businesses & platforms, Amit Goenka.

    Commenting on his new role, Mittal said, “My job at ZEE is to worry about technology in the future. If you want to have a great future you have to start thinking about it in the present, because when the future’s here, you won’t have the time. (Brockman 2003). I’m committed to helping our clients and various teams’ professional dreams come true. As an organization we aim to create an environment that sparks innovation. I will do my best to support and implement the great ideas the teams come up with.”

    Mittal has two decades of experience, during which he has worked with National Payments Corporation of India (NPCI) to build the Unified Payments Interface (UPI) framework for the country and with the Unique Identification Authority of India (UIDAI) on reframing the Aadhar platform to drive the exponential growth of its coverage in India. He was also associated with Standard Chartered, IBM, TESCO, BNY Mellon, Wipro and the Future Group in the past.

  • ZeeL to scale down investment in SugarBox significantly

    ZeeL to scale down investment in SugarBox significantly

    KOLKATA: When things aren’t working out, it’s better you step back until they start looking better.  Exactly how Zee Entertainment Enterprises Ltd (Zeel) is doing with its investment in internet connectivity start-up Margo Networks. It was barely a year ago that it had announced that it would invest Rs 522 crore in the latter which offers bandwidth to consumers under the brand name SugarBox.

    The broadcaster aimed to create a tech-content synergy through the investment in order to help subscribers get over connectivity constraints that plague India’s mobile networks. However, Zeel has decided to scale down its investment in SugarBox owing to the changing situation.

    “Given the current pandemic and uncertainties, we will not be investing very aggressively behind SugarBox. From our original plan itself, it will be scaled down significantly for the foreseeable future,” ZeeL MD & CEO Punit Goenka said during an investors’ call.

    Of all the reasons behind the decision, one is that the project has been delayed significantly. ZeeL was expecting it to roll out in February but the pandemic has hindered its execution. As no one knows how long Covid2019 will last, there are fair chances of a further delay.

    “More importantly, even after everything stabilises, we don’t know how the traffic will build. Traffic consumption was very different when we planned the project. For FY22, we do not see that kind of investment that we were planning earlier,” ZeeL investor relations, corporate strategy head Bijal Shah said.

    Reduction in non-core investments in Sugarbox due to the COVID-19 pandemic is a welcome step, brokerage firm Motilal Oswal said in a recent note.

    “The unique technology will enable us to serve content to consumers across the nation, without being restricted by connectivity constraints. We are confident that this synergy will create a strong foundation for us, as we progress towards offering relevant content to consumers across platforms,” Goenka said at the time of the investment.

    However, analysts were sceptical of the timeliness of the investment from the beginning. Brokerage firms found it ill-timed due to a weak ad environment.

    In the year 2017, ZeeL had acquired an 80 per cent equity stake in SugarBox. The latter creates a hyperlocal data distribution ecosystem by installing CDN Edge servers at key places of interest (POIs), which users can connect to over a local Wi-Fi network.

  • We have taken a relook at our entire strategy at Zee5: Punit Goenka

    We have taken a relook at our entire strategy at Zee5: Punit Goenka

    KOLKATA: The over-the-top (OTT) market is ripe for growth in India, the segment which has emerged as one of the most obvious winners in the pandemic time. Most OTT platforms in India have multiplied their user base over the last year. Zee5 was no exception as it also drew more viewers to its platform, but it may take some time before the paid subscription base is reflected in its overall revenue.

    Zee5’s global monthly active users (MAU) and daily active users (DAU) have gone up to 72.6 million, 6.1 million respectively in q4 from 65.9 million, 5.4 million in the q3. Despite the growth, its revenue has declined to Rs 107.5 crore in the quarter from Rs 117.8 crore. However, EBITDA loss has come down to Rs 162.5 core from Rs 175.7 crore in q3.

    The fall in revenue is on account of advertising, Zee Entertainment Enterprises Limited (ZeeL) MD & CEO Punit Goenka said in a conference call post the earnings. But that is cyclical in nature, Goenka noted. Along with that, pending telco deal renewal is another reason for the drop in revenue. Moreover, the platform saw a bump up in revenue in the previous quarter because of the festive season, ZeeL investor relations, corporate strategy head Bijal Shah added.

    However, Zee5 may see a better result in Q1 of FY22 as the blockbuster Radhe has premiered on the platform and management seems confident about the movie’s performance. “Radhe has done what we expected it to do for us,” Goenka highlighted saying the film has been quite successful for the platform. However, he did not delve into deeper numbers as it has been only a week since the release of the movie. The company hopes Zee5 revenues to move up in Q1 on the back of the film along with other reasons.

    Predominantly, the platform’s MAUs and DAUs are coming from its own organic growth as telco partnerships are only on the subscription side. On the AVoD side, 90 per cent of users are coming from India as there are few international markets of Zee5 with an advertising model. As the platform plans to launch Zee5 in the UK, US, Europe market, those markets will only have a subscription-led model.

    “We are seeing people moving to SVOD service (in India). It is slow but it is certainly heartening to see people who come to the funnel of catch up TV and then move to paid services,” Goenka added.

    Zee5 last year took several new innovations like adding education content, gamification of shows, and launching short video segments. Goenka was asked on the call why Zee5 didn’t continue its efforts in those segments. “We never got into e-learning, gamification itself. These initiatives were partner driven,” he responded.

    “Certainly, a lot of our content may not have succeeded or was not for the right audience base that we have seen but we have taken a relook at our entire strategy at Zee5. We planned to reduce the pricing to Rs 499 per year in line with what is happening in the market. That is one value proposition,” Goenka quipped.

    “Other value proposition is going to be a focus on good quality content in the form of films as well as originals across multiple languages that we are going to focus on going forward,” he stated further.  Goenka also remarked that Zee5 is going to focus on the tech platform significantly for it to be an app that can delight consumers.

  • ZeeL clocks strong quarter with Rs 275.8 crore profit

    ZeeL clocks strong quarter with Rs 275.8 crore profit

    KOLKATA: Zee Entertainment Enterprises Limited (ZeeL) has posted operating revenue of Rs 1965.8 crore for the fourth quarter. The leading broadcaster has reported a consolidated net profit of Rs 275.8 crore for the quarter ended March.

    Advertising revenue for the quarter stood at Rs 1123 crore and subscription revenue was at Rs 803.4 crore. The company said the growth in subscription revenue was driven by Zee5.

    Domestic advertising revenue for the quarter grew by 8.9 per cent year-on-year driven by the continued recovery in the macro advertising environment. Overall, domestic advertising revenue declined by 19.7 per cent in the financial year 2020-21 due to the continued impact of the pandemic in H1.

    Programming cost, excluding one-time inventory write-off of Rs. 259.8 crore, declined by 19.2 per cent during the quarter, primarily due to lower accelerated inventory amortisation this quarter; Adjusted programming cost for the year declined by 8.2 per cent due to lower original programming during first quarter.

    Zee5’s revenue and EBITDA for the quarter stood at Rs 107.5 crore, Rs (162.5) crore. The platform’s global monthly active users (MAUs) 72.6 million monthly active users, daily active users (DAUs)6.1 million global DAUs at the end of March. Zee5 viewers spent 156 minutes on average per month.

  • The subtle changes at Zee Entertainment.

    The subtle changes at Zee Entertainment.

    MUMBAI: Almost slowly and steadily Punit Goenka’s Zee 4.0 vision is being executed in India’s leading media and entertainment enterprise. Ofcourse the organisation has been restructured, new lines of reporting come in and new hires have been brought in.

    But almost silently, the Zee corporate website has changed as has the email address of Zee executives. From zee.esselgroup.com, it has now been modified to zee.com keeping with the fact that the promoters – the Subhash Chandra family – have only a minority position in Zee Entertainment Enterprises Ltd (Zeel).

    The most striking change is the new website developed during the pandemic. With a very international looking design, it far surpasses the look and content of its rivals in the same space. Zee.com covers everything from the company’s mission, vision, policies, its brand identity, leadership, investor information, different business – it is a treasure trove of information.

    Compared to its earlier website design, Its current one is almost as different as chalk is from cheese.

  • Zeel brings in two solid independent directors

    Zeel brings in two solid independent directors

    MUMBAI: As part of his Zee 4.0 vision commitment, CEO Punit Goenka had vouched to strengthen the company’s board by inducting very well-qualified independent directors. Living up to that promise, the company has announced the appointment of angel investor Kae Capital MD Sasha Gulu Mirchandani (48), and former Price WaterhouseCoopers senior executive Vivek Mehra (65) – who is also actress Neena Gupta’s husband – on its board as independent directors.

    Mirchandani has experience at the intersection of finance, technology and digital commerce in India, having seed/venture funded and mentored some of the largest unicorns in India. He has deep insights about how technology is shaping new business models and how companies can leverage emerging technologies to get competitive advantage in products and markets. He sits on the boards of Hathway Cable and Datacom, Nazara Technologies, Healthkart, Kae Capital Management Private Ltd, Algorhythm Tech Private Ltd, among others. Previously, he served on the boards of Myntra, 1Mg, and Ador Welding, to name a few.

    Mehra, on the other hand, worked at PWC for almost two decades. During his tenure there, he founded and headed the regulatory and M&A tax practices and was elected to the governance oversight board of PWC for two terms. He sits on the boards of HT Media, Chambal Fertilisers and Chemicals, Jubilant Life Sciences, Havells India, Digicontent, and DLF, among others.