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Tag: Zee

  • Kaushal Nanavati and Sumeet Saigal announce the launch of Content Bridge

    Kaushal Nanavati and Sumeet Saigal announce the launch of Content Bridge

    Mumbai: Kaushal Nanavati, with over 24 years of experience in the Indian media landscape, has joined hands with industry veteran Sumeet Saigal launching their new venture, Content Bridge.

    Kaushal Nanavati boasts of a career spanning over two decades across respected media brands like Disney, UTV, Zee and Shemaroo.

    Sumeet Saigal is a renowned figure in the Indian media as a successful aggregator of content among other business interests.

    Both founders bring on board decades of experience in content aggregation, sales, launching TV channels & on-demand services across the globe.

    As the name suggests, Content Bridge will endeavour to bridge the gap – across content, technology and media-related services.

  • This Mother’s Day, ZEE urges moms to Vote For Themselves!

    This Mother’s Day, ZEE urges moms to Vote For Themselves!

    Mumbai – ZEE, India’s leading media & entertainment conglomerate, has released a touching Mother’s Day film, with a heartfelt message for mothers to also think about themselves for once – that amidst the ceaseless duties of motherhood, it’s crucial for moms to pause, reflect on their own little hopes and aspirations, and celebrate the simple joys of life that bring them happiness. The film underscores how mothers often lose sight of their own identity while prioritizing the needs of their loved ones. This Mother’s Day, the ZEE Network urges mothers to vote for themselves and reclaim moments of self-discovery, embrace the small pleasures in life, and listen to the whispers of their own hearts. It is a tribute to the giving nature of mothers worldwide, urging them to embrace their individuality and prioritize self-care amidst the beautiful chaos of motherhood.

    ZEE’s content design approach rests on building an intimate understanding of the viewer and telling stories that reflect themes that are closest to their heart. As the role of mothers evolves in society, ZEE’s content depiction has moved from traditional portrayals of a mother as a self-sacrificing nurturer to more contemporary narratives that showcase mothers becoming more self-aware, looking after themselves, voicing their own choices and sharing their opinions. This shift is brought to life by some of ZEE’s most loved mothers such as Bhawani of Zee TV’s Kaise Mujhe Tum Mil Gaye, Tulasi from Zee Kannada’s Shrirasthu Shubhamasthu and Vasundhara from Zee Marathi’s Punha Kartavya Aahe.  

    ZEE’s social media clout boasts of a staggering 191 Mn followers and subscribers, fuelling 18.4 Mn organic interactions and 3.5 Bn organic monthly video views.  This contributes to 38% SOV on social, making ZEE the No. 1 broadcaster in the digital realm.

    Ashish Sehgal, Chief Growth Officer – Advertisement Revenue, ZEE said, “Television is undoubtedly the most trusted medium for viewers and brands. Advertisers have an opportunity to not only leverage the reach and deep regional strength of ZEE but also engage meaningfully through our social and digital assets, where we have built a strong community of followers. This community can spark meaningful conversations with inspiring characters and stories that align perfectly with the brand’s ethos, helping strengthen the brand’s connection and driving desired brand actions.”

    *Kartik Mahadev, CMO & Head of OptimiZEE said,* _“The emerging GEC viewer is changing at a rapid pace and so are their content expectations. There is a distinct shift from ‘Duty’ to ‘Desire’ where women are beginning to make choices based on what they ‘WANT’. Our content innovation is driven by many such emerging consumer themes. Through authentic storytelling that is rooted in empathy, our characters address important societal needs, resonating with viewers on a deeper level. Our narratives provide the perfect context for brands to engage with their target audience, fostering meaningful dialogue and connection. One such example is our focus on ‘self-care,’ where we emphasize that it’s not a luxury but a necessity for mothers to at least occasionally prioritize themselves. Our campaign #MaaKaVote showcases many such moments from our shows that will enable brands to build emotional resonance, join the conversation and engage with their target audiences.”

    ZEE extends a compelling invitation to brands that are eager to forge authentic connections with their audiences, to join forces with its dynamic community, aspirational characters, and culturally resonant narratives to harness the unparalleled power of storytelling. 
     

  • Kyoorius & ZEE to ‘GiveBack’ 50 per cent entry fees of Kyoorius Creative Awards 2024

    Kyoorius & ZEE to ‘GiveBack’ 50 per cent entry fees of Kyoorius Creative Awards 2024

    Mumbai: The eleventh edition of the Kyoorius Creative Awards, presented by ZEE, is now live and calls on the advertising industry of India to GiveBack.

    Since its inception, the Kyoorius Creative Awards has recognised and rewarded creative excellence in Indian advertising at a global standard. The directive for 2024, is to galvanise the community to GiveBack to the industry that has given them so much.

    To kickstart the initiative, Kyoorius GivesBack. For every entry that does not make it into the First List (i.e. beyond the First Round of judging) at the 2024 Kyoorius Creative Awards, Kyoorius will GiveBack 50 per cent of the entry fee to the entrant.

    A deep dive into the global awards ecosystem revealed that over 75 per cent of all entries in any award show go unrewarded or are literally, rejected in the first round of judging itself. This deters numerous advertising professionals from even entering. This year, Kyoorius will GiveBack to the over 70 per cent.”

    The Kyoorius Creative Awards itself sees only 18 per cent to 24 per cent of entries graduating to the First List, or the entries that fulfill the judging criteria of the first round of judging at the Kyoorius Creative Awards. The First List, hence, forms the pool of entries that have the potential to win Elephants.

    “Beyond recognising excellence, Kyoorius also stands to recognise obstacles,” said Kyoorius founder and CEO Rajesh Kejriwal. “Addressing the pain points of our entrants and the award ecosystem has always been our mission. Globally, Kyoorius was the first to initiate an open and transparent judging process. Every year, we’ve fine-tuned the awards to reflect the realities of the industry. This year, GiveBack continues that ethos.”

    “We’re proud to continue our support for the Kyoorius Creative Awards and its newly launched ‘GiveBack’ initiative, building upon our longstanding commitment to fostering creativity and supporting the advertising fraternity. Through this bold initiative, we intend to empower every entrant, ensuring that their efforts are valued, regardless of the outcome. At ZEE, we’ve always championed the cause of the creative ecosystem and this initiative aligns perfectly with our ethos of nurturing creativity, innovation and inclusivity.” added ZEE MD and CEO Punit Goenka.

    Kyoorius has also detailed strategic changes to simplify and enhance the entrant experience. The Kyoorius Creative Awards now span eight tracks to simplify the various disciplines and categories, making it easier for entrants to enter work. The tracks include advertising, craft, experience and engagement, entertainment, creativity for good, the ZEE Equality Awards, and address new areas: regional advertising and health & pharma.

    The regional advertising track aims to celebrate creativity in Indian languages beyond English and Hindi. The health and pharma track allows entrants across the specialist healthcare and pharma space to compete on a fair playing field whilst driving the sector forward to new creative heights.

    Other changes to the disciplines and categories include the introduction of a new creativity in PR discipline under the experience and engagement track, and nuanced revamps to the film, digital and social media, creative use of media, technology and creativity for good disciplines.

    Entries to the Kyoorius Creative Awards are priced at a flat Rs 15,000/- (excluding taxes) to all tracks, except regional advertising and the ZEE Equality Awards. Entries to the Regional Advertising track are priced at a flat Rs 10,000/- (excluding taxes). As always there are no fees to enter the ZEE Equality Awards.

    Kyoorius continues to curate a world-class jury and announcements will be made shortly. The deadline for entries to the Kyoorius Creative Awards 2024 is 19 April 2024.

    Visit kca.kyoorius.com to enter, and for additional information about key dates, the tracks, disciplines, categories, eligibility, rules and more.

    The Kyoorius Creative Awards are presented by ZEE, with outdoor partner Laqshya Media, and supported by Indian Creative Women.
     

  • Zee denies report of cancellation of merger

    Zee denies report of cancellation of merger

    Mumbai: The much-anticipated merger of Zee and Sony has come in a different mode on Tuesday. Zee clarified to the stock listing department about news led by the Economic Times and dismissed all claims of termination of the merger agreement costing Rs 10 billion.

    The company also said the report is baseless and factually incorrect. The news was published in ‘Economic Times’ titled, ‘ The Insider story of what went wrong over two years’. While clarifying these aspects, ‘ We wish to reiterate that the company is committed to the merger with Sony and continuing to work towards a successful closure of the proposed merger.’ Zee said in its released notification.

    Zee also clarifies to abide by commitment for all compliances to SEBI (Security Exchange Board of India) as per Listing Obligations and Disclosure Requirements) Regulations 2015 and will continue to make disclosures in accordance with the same. Zee company secretary Ashish Agrawal shared disclosure clarification.

    After the closing bell shares of Zee Entertainment were down by 8 per cent. ET reported on January 9 regarding potential calling off the deal between Sony and Zee.

  • If not Sony, then who for Zee?

    If not Sony, then who for Zee?

    Mumbai: It’s on. It’s off. It’s on again. It’s off again. The yes and no speculation about the Zee Entertainment merger with Culver Max Entertainment (Sony in India) has been crazy enough to  blow one’s brains in almost every direction.

    Yesterday, Zee-baiters and haters must have gone all gleeful when Bloomberg broke the news that Sony is dis-inclined to go ahead with the fusion courtesy all the brouhaha that has been created around allegations that father Subhash Chandra and son Punit Goenka personally pocketed company-borrowed money. This despite, Punit was loathe to agree to Sony’s demand that he accede his position as CEO of the merged entity to Sony India head NP Singh. Indian media bit the bait of the “failed merger” news and went to town and proclaimed the death of the merged entity. Both Zee and Sony kept their lips zipped officially.  

    Towards evening came a report that a partnership might yet be in discussion splitting the odds equally. The reason: a penalty of $100 million will have to be paid out to Zee TV by Sony should they pull out of the merger, said a few newspaper reports. Others suggested Zee had failed to live up to many conditions precedent in the merger agreement documents between the two and hence a tremendous trust deficit has been built up between the two.  (These reports have since been denied by Zee in a regulatory filing and it has claimed that it is continuing to pursue the merger agreement).

    Sony has to respond to  Zee’s last month’s merger proposal and new conditions by 20-22 January and agree or disagree to the terms; it still has a lot of time to decide. Then why be in a rush to have anonymous sources make the revelation that its interest was off the table? Did the Bloomberg journo misquote the source? Or was Sony just testing how Zee would react to its disgruntlement? Would the latter take advantage of the stringent exit clause and howl or would it just walk away quietly?

    Whatever be Sony’s rationale, it’s imperative that it gets clarity sooner than later. That’s because a megalith is being created with the signing of an agreement between Mukesh Ambani’s Jio (Viacom18) and Disney’s India operations under Disney + Star India. The agglomeration of the two will create a giant which will control a sizeable chunk of the market by viewership. That’s something which many are saying could  harm the development of the media & entertainment vertical in the long term, especially placing oodles of power in the hands of one giant.

    Sectors do better when there is an equally fit No 2 giving the No 1 a run for its dollars. And a No 3 and a No 4. Muscle is needed to fight muscle. Sony, Zee, Sun TV on their own will be dwarfed in front of the Jio-Disney combine. Yes, we have gorillas like Netflix, Amazon, Google, Microsoft operating in India.  But one is not clear about how they will play their hand going forward. A few smaller players will innovate and through their nimble-footedness score a few points. But the advantage of scale of capital, content creation, distribution, and advertising inventory will lie with one major – Jio-Disney.

    We have seen how Jio has changed the dynamics of the telecom as well as streaming business, thanks to its humongous 400 million plus telco subscribers. Making premium sports and entertainment content available for free to subscribers can be a good customer acquisition strategy. But for how long will that go on and that too unchallenged?

    Cable TV operators have been crying foul to the regulator TRAI as the same content on cable TV and DTH is being levied at a fee to subscribers. True, the government wants to make TV available to many more though its free to air service DD FreeDish. For obvious reasons. It wants to be able to address large swathes of the  population across the nation on one platform, rather than have to engage with many more outlets. And it wants it to say what the powers-that-be want to say.

    In such a scenario, it’s imperative that consolidation in the industry is encouraged. So that balance and sanity are maintained.

    Let’s suppose that Sony is willing to let go of a hundred mill in penalties for calling off the merger. Will a corporate raider swoop in jostling out the promoters? Doubtful, considering media is a specialized business which is transforming so rapidly that no non-strategic corporate will be willing to lose billions of dollars in trying to set things right at Zee. Especially considering that its margins have been under pressure and how much cleaning up it needs on several fronts.

    Then, what are the white knight options left for Zee to get scale and get out of its financial commitments to debtors as well as get infusion of cash for growth.

    Private equity? Hedge funds with mountains of resources? They might be cautious, considering how Sony has fled from getting into bed with it.

    Could Adani be interested? He is yet digesting his news venture NDTV and digital acquisitions, so interest from his side might be lukewarm.

    Or could it be Kalanithi Maran’s Sun TV?

    It seems like a good fit. Both Chandra and Maran -run entrepreneurial organisations. Both are pioneers and the latter has so much cash, he does not know what to do with it. Sun TV is strong in the south, Zee TV has strengths in Hindi and some regional languages. Sun TV is nurturing a Hindi language entertainment channel. A joint venture will see lots of benefits accruing to both. The two business groups will have to keep aside the personal and professional differences of the promoters and look at long term survival and growth.

    But that’s in the future. Now, if Goenka and Chandra can find ways to assuage the miffed mood amongst executives in Sony headquarters, the story might have a fairy tale ending like the two want.

    The author is a media analyst. The views expressed in the comment piece are his own and indiantelevision.com need not subscribe to them.

  • Sony likely to call off merger – a low probability event for now

    Sony likely to call off merger – a low probability event for now

    Mumbai: According to media reports, Sony is expected to call of USD 10bn merger with Zee due to a standoff over whether Zee’s CEO Punit Goenka would lead the merged entity.

    Sony plans to file the termination notice before a 20 Jan 2024, extended deadline for closing the deal, saying some of the conditions necessary for the merger had not been met.

    Discussions are still ongoing between the two sides and a resolution can still emerge before the deadline.

    View

    We don’t foresee any negative impact of above so far. As per our checks, deal conversations continue and will most likely go ahead without Goenka as CEO; we expect a final clarity on the extension of the deal by third of week of January’24, which is almost a month ahead of the 20 Dec’2023 agreement cut off date. Conversations continue to happen for both parties, however no final outcome has been reached yet on terms of the deal.

    We continue to believe that the deal is equally important for both entities with competitive intensity growing due to Disney/RIL talks gaining traction.

    Maintain our view the likelihood of the deal going through remains high, Zee had made a statement on 20 Dec, 2023 on entering fair negotiations with Sony, which indicates that they too are very much in favour of the deal going through.

    We will await more updates and any official statement from both parties, in case of change in stance. We don’t foresee Sony agreeing on Mr Punit becoming CEO, due to the ongoing investigation against him. However, there is a very small chance of Goenka putting the deal at risk due to him wanting to become CEO, even if term sheet and deal condition mentions that Zee has moved up 50 per cent over the last one year, despite a muted financial performance , largely on the back of valuation multiple re-rating due to the merger with Sony Corp; any potential risk of the merger getting called off by Sony will have a significant negative impact on valuations.

    Post the change in deal terms/ potential name of a new CEO for the merged Co, shareholder, Board, ROC (Registrar of Companies) and MIB (Ministry of Information and Broadcasting) approval may be needed which may only take a few weeks; our legal experts indicate that a fresh NCLT/CCI approval will not be needed for change in CEO of the merged co; further, as per our assessment – the NCLT/CCI  approval isn’t time bound, which means any potential extension has no negative impact on the merger.

    The credit of this article is attributed to Elara Capital SVP Karan Taurani. 

  • Zee proposes merger extension with Sony

    Zee proposes merger extension with Sony

    Mumbai: The merger agreement between Zee and Sony dated 21 December 2021, was to be closed by 22 December 2023 (two year period); Zee has proposed extension of the same with Sony.

    Indiantelevison reached out to Sony for their comments. This is what they had to say, “Sony is evaluating the request”.

    According to Zee, in its stock exchange filing, reported that pursuant to the Merger Cooperation Agreement dated 22 December 2021 entered into amongst the Company, Bangla Entertainment Private Ltd (‘BEPL’), and Culver Max Entertainment Private Ltd (formerly known as Sony Pictures Networks India Private Ltd), the company has requested CMEPL and BEPL to extend the date required to make the scheme effective, as per the terms of the Merger Cooperation Agreement.

    The request by Zee to extend the deadline comes just a day after two independent directors were unable to secure the re-appointment of the company’s board.

    Directors Sasha Mirchandani and Vivek Mehra “failed to get the requisite majority of votes,” the company said in an exchange filing.

    Sony Pictures Networks India (SPNI) commented, “ZEE’s notice to the Bombay Stock Exchange and the National Stock Exchange of India dated December 17 is an acknowledgement that they will not be able to meet the December 21, 2023 deadline to close the SPNI/ZEE merger. The notice triggers an existing contractual provision in the deal that allows for both parties to discuss the possibility of extending the deadline. SPNI is required to start those conversations but has not yet agreed to a deadline extension. We look forward to hearing ZEE’s proposals and how they plan to complete the remaining critical closing conditions.”

  • TV18 & E18 to merge with Network 18

    TV18 & E18 to merge with Network 18

    Mumbai: Merger of TV18 and NW18 is a serious attempt made to target a larger share in the fragmented M&E market of India, specifically within digital media (search, display, social, e commerce, video, news , audio), which also has a larger set of advertisers spread across SME’s, apart from large verticals. India’s M&E market for TV, print and digital put together is quite large at Rs 1,530bn (CY22); having a bundled offering with a larger target audience/reach will help scalability on revenues and also help a better reach amongst varied set of advertisers. The merger could be a potential win-win for both entities as NW/TV18 have reported a tepid EBITDA margin of a mere 12.3 per cent/13.4 per cent (average of last four years); we believe 1) cost control measures, and 2) synergy benefits will drive efficiencies for the merged business. Further, a bundled offering under the NW18 umbrella, with a subscription plan at discounted price augurs well for a price sensitive market like India, coupled with a large reach of more than 450mn smartphone users by Jio (part of RIL, which is NW18 parent Co.).

    India market is all about aggregation of content across various mediums, which will offer better subscription revenue and visibility over content spends across mediums to create a strong pay/subscription-based model via bundling in a price sensitive market like India; higher subscription revenue can offer better visibility over content costs (across mediums). A superior user experience across all offerings coupled with differentiated and good quality content will be the only factor to drive a potential subscription revenue base. We don’t foresee any negative impact of above for listed peers like Z and SUNTV, as they don’t have presence in the news segment; however, in case of NW18 forming a media super app, providing all variety of content could pose a threat for the M&E ecosystem. Listed news players like TVT could see a negative impact of the above merger as they have digital news assets and TV channels.

    Implications of the event (Impact analysis):

    •  Large market opportunity (TAM)for the merged co., as India’s M&E market for print, TV and digital is at Rs 1,530 (CY22) , poised to grow at a CAGR of 8.2 per cent over CY22-25.

    •  This move will bring all mediums of media by NW18 under one umbrella; Print, TV and other mediums have seen a disruption over the last few years due to consumption moving to digital; this will provide respite to NW18 traditional media assets as it can be bundled with digital offerings

    •  NW18 will be able to cross sell strengths of all media assets and target better advertising revenue with scale over the medium to long term

    •  The merger will be an advantage for driving efficiencies with all operations, employee, and all other expenses (marketing, operations) under one umbrella to enhance portfolio strength and operating leverage

    •  NW18 may be able to offer all services and subscription on a bundled basis – subscription of the print magazines ,premium plan of Jio cinema and Moneycontrol pro

    •  The merged co. can target a larger variety of advertisers who can provide ad budgets to be split across various mediums

    •  A media based super app could also be formed offering all types of media content – 1) digital news 2) TV content 3) sports 4) web series/movies 5) ticket booking, which in turn can have a large customer base and can be used potentially for better ad revenue/monetisation of eyeballs. This kind of app with varied offerings could pose a serious threat to other video/broadcaster OTT apps.

    •  NW18 will also have a big advantage of last mile with Jio having a subs base of more than 450mn smartphone users

    Background of the event

    Network18 Media & Investments Ltd and TV18 Broadcast Ltd have announced a scheme of arrangement under which TV18 and E18, which owns and operates the Moneycontrol website and app, will merge with Network18. The proposed Scheme will consolidate TV and Digital news businesses of the Network18 group in one company and will help create India’s largest platform-agnostic news media powerhouse with the widest footprint across languages, straddling both TV and Digital. The merged entity will comprise the TV portfolio of TV18 (20 news channels in 16 languages and CNBCTV18.com), Digital assets of Network18 (News18.com platform across 13 languages and Firstpost) as also Moneycontrol website and app. Viacom18 with its portfolio of JioCinema and 40 TV channels will be a direct subsidiary of Network18. The appointed date for the merger is set as 1 April 2023 and the share exchange ratio stipulates that for every 172 shares of TV18, shareholders will receive 100 shares of Network18 and for every share of E18, shareholders will receive 19 shares of Network18. Post the merger, promoter shareholding in Network 18 will decrease to 56.9 per cent from 75 per cent while the public shareholding will move up to 43.1 per cent from 25 per cent.

    The credit of this article goes to Elara Capital SVP Karan Taurani.

  • Freemium model in OTT is the future

    Freemium model in OTT is the future

    Mumbai: US subscriber base of Netflix and Disney+ reported growth of 5.4 per cent YoY and 0.2 per cent YoY in Q3CY23, respectively; the international segment outperformed with subscriber growth of 10.5 per cent YoY and 17.0 per cent YoY for Netflix and Disney+, respectively. Netflix continues to lead as it has a paid subscriber base of 247.2mn vs 150.2mn of Disney+. Disney+Hotstar(India and other Asia nations) paid subscribers declined for the fourth consecutive quarter, as it fell 38.7 per cent YoY; Disney+ Hotstar has lost 37 per cent of its paid subscriber base (now at 37.6 mn paid subs) over the four quarters after 1) losing Indian Premier League (IPL) digital rights and 2) offering World Cup content free of cost, which also has led to a loss in paid subscriber base over the past two months. We believe Disney+Hotstar subscriber loss has bottomed and may see mid-single digit growth over the next few quarters based on new content offerings – movies and web series slate. Netflix (US) average revenue per user (ARPU) declined 0.5 per cent YoY whereas Disney+ (US) posted ARPU growth of 23 per cent YoY (on a low base) during the quarter. In India, Disney+Hotstar was the only platform that grew 20.7 per cent YoY to USD 0.7 or Rs 58 per month on low base.

    Focus on cost optimisation driving increased monetisation

    Netflix’s innovative move on paid sharing has reaped rich dividends, as it has led to better subscriber growth, which was 9.4 per cent YoY (average) over the past two quarters since the introduction of this feature in May’23 ; the ad tier model too has received a positive response and can become big, led by connected TV adoption globally, as Netflix also plans to make inroads in the gaming business too. Disney+ has also seen success in the ad supported plan, as 50 per cent of new subscriber addition is on ad-supported model. Disney+ plans to reduce losses in the streaming business and has cut annual content budget by 7 per cent YoY to USD 25bn. Disney continues to evaluate strategic options for its linear TV networks while maintaining focus on cost optimisation and high-quality content delivery.

    Read through for Indian OTT

    Zee5, India’s larger broadcaster peer, too has focused on efficiency in its digital business, as losses narrowed marginally by 8.3 per cent YoY to Rs 2.5bn. India’s OTT market has seen a big disruption post Jio Cinema’s free offering of IPL content, which, in turn, will negatively affect subscription video on-demand (SVOD) revenue growth, as platforms may be unable to raise prices; innovative measures, such as ad-supported streaming and password-sharing initiatives may be the only levers for better monetization. Disney+Hotstar continues to look for a strategic partner, and high probability of the Z-Sony merger, we still believe India’s OTT market will see early signs of consolidation in the near to medium term, which is the only way content cost would climb down and enable platforms to move closer to break-even & profitability.

    The credit of this article goes to Elara Capital SVP Karan Taurani.

  • SAT allowing Punit as CEO of Zee/Sony merged co. – a potential overhang if Sony does not agree on the same

    SAT allowing Punit as CEO of Zee/Sony merged co. – a potential overhang if Sony does not agree on the same

    Mumbai: As per media reports (link – https://tinyurl.com/4sfbhbn4

    ), Sony does not want Punit Goenka to head Zee/Sony merged co, amidst the ongoing SEBI investigation which will continue despite interim relief from SAT. We believe this is as per our two scenarios pointed out earlier (scenario 1 – merger process expedited with clarity over Punit and scenario 2 – Sony not in favour of appointing Punit as CEO amidst the ongoing investigation), which clearly mentioned that Sony may not be in favour of having a CEO who is undergoing an investigation.

    Legally, we don’t foresee any challenge in appointing Punit as CEO, post the relief by SAT- as indicated by primary checks with legal experts too. However, as Sony is the majority in this merger – they may decide to appoint someone else due to this investigation; there is a high likelihood of Sony appointing someone internally to head the merged co.

    There is minimal impact of the above move (change in CEO) eventually, as the appointment of a new CEO will require a mere shareholder and Board approval; as mentioned earlier, we don’t foresee big delays beyond a point for the merger and the process could end over next 8-12 weeks, as Sony may not wait longer than that. Hence, we don’t even expect a big delay as such on the merger due to this move. Expect a larger transition time in business synergies case of Sony acquiring Zee without Punit, due to a potential new management for Zee

    Albeit above, 1) the business synergies, 2) superior CG (corporate governance) practice, 3) scale in OTT remain to be the drivers for the merged co and this could drive superior valuation multiples.

    Various scenarios that could emerge basis above – if Punit Geonka changes his stance and wants to remain CEO of the merged co, post SAT approval or keeps his stance (not wanting to become CEO)

    1) Scenario one – Sony may back out – merged called off  (Probability -20 per cent)

    In case of Punit Goenka wanting to be the CEO of the merged co. and Sony not agreeing upon the same,  it may lead to Sony backing out of the merger. We believe the probability of this event seems to very low, as the merger is very important for Z shareholders and the Goenka family; also, Sony may struggle to scale up in a market like India in case Disney is acquired by Reliance. We believe Sony too is equally eager for the merger as Z is, as the linear TV and OTT market has turned disruptive.

    2) Scenario two – Punit remains CEO of the merged co (Probability -10 per cent)

    In this scenario, Sony may allow Punit Goenka to remain as CEO and have their own finance, operations team for day to day affairs, with a majority on Board by Sony. However, given Sony’s MNC culture, this may seem to be a low likelihood event, unless they legally need to do it (As per term sheet of the merger) and cannot back out of the merger; Sony may not want to have a CEO on Board, who is under a SEBI investigation

    3) Scenario three – Punit may be offered a board seat, but not a CEO role (Probability -30 per cent)

    In this scenario, Punit may be offered a Board seat in the merged co, but not a CEO designation, until the outcome of investigation is known. This in turn may lead to superior CG practices in Z, with change in finance and operations team post the merger by Sony. This could potentially be a win-win for both parties, if mutually agreed upon. Further, Punit may also ask Sony for a higher non-compete fee in case he plans to step aside of Zee and not become CEO. We believe the probability of this event is on the higher side, as Punit may eventually agree to be on Board in the interim, until the outcome of investigation is known with a higher non compete fee

    4) Scenario four – Merger goes ahead without Punit (Probability – 40 per cent)

    In this scenario, Punit Goenka agrees to step aside as CEO if Sony decides to call off the merger; Sony may continue to run its India operations in India if the merger is called off, but Zee may struggle as valuations may come off atleast 50 per cent if the merger does not go through, which in turn could hamper shareholder and promoter stake valuation in Z today. We thus believe that at the end of the day, bargaining power is limited from Z promoter side, and they may have to agree upon the same. Sony can also seek shareholder approval (consortium) and go ahead with the merger without Punit Goenka. We believe probability of this event is the highest as shareholders own the company, with promoters having a mere 4 per cent stake.

    In terms of merger process, Z has already filed with ROC (Registrar of Companies); the merger process has reached advance stages and hence it may be tough for Sony too to back out of this merger. We thus believe that the likelihood of this merger going through remains high (80 per cent probability) with or without Punit Geonka; however, the recent approval by SAT allowing Punit as CEO and Sony not agreeing upon the same is a potential risk for the merger, as probability of the merger not going through moves up to 20 per cent now. As per our checks with legal experts, SEBI will file a stay in Supreme Court against the SAT order by end of this month. We await updates from Sony and Zee management, which will provide us more colour on where this merger could be headed.

    The credit for this article goes to Elara Capital Sr VP – research analyst (media, consumer discretionary & internet) Karan Taurani.