Mediaah!: Why Mukesh Ambani’s Network18 foray is good news for the Indian media

04 Jan,2012

By Pradyuman Maheshwari

 

It’s a complex deal and required the financial wizardry of the accounting boys at Reliance Industries, Network 18 and their advisers.

 

The bottomline is: Reliance is buying into Network 18 and asking it to manage its interests in ETV. Mind it, Network 18 and Television 18 are still Raghav Bahl companies with a majority and controlling stake. Also, Reliance is not going to have Mukeshbhai playing supereditor. RIL has set up a trust (Independent Media Trust) with eminent people as members.

 

The Ambanis love affair with the media started ever since his father Dhirubhai got into the big league and had a soured relationship with The Indian Express founder Ramnath Goenka. The Ambanis bought over the much revered Commerce Weekly and turned it into a business daily called The Observer of Business and Politics. It also bought over The Sunday Observer. Both the papers shut and there have been rumours ever since of brothers Mukesh and Anil infusing funds in media ventures indirectly.

 

There were direct ones too like Reliance Entertainment with Amit Khanna at the helm and later Rajesh Sawhney and now Tarun Katial leading the agenda. But it’s the indirect, in-the-closet funding that’s always been of interest. At least one large newspaper and one news channel are said to have benefitted from their largesse.

 

Interestingly, Anil Ambani’s Reliance Capital had also picked up some stocks in Bahl’s enterprise a while back and more recently a sizeable chunk in Bloomberg UTV. The Bloomberg-licensed channel is now controlled by Reliance ADAG.

 

While there could be issues of how the interests of big business companies will impact the content of the media they own, especially when there are controversies like we had with Niira Radia and the 2G scam, to my mind the entry of the Ambanis into the media is good news.

 

The media sector – news media specifically — has been facing awful times. There have been many wrong investments and more importantly the spends are much higher than revenues. The sector is also majorly underleveraged, with airtime most often being sold at a song.

 

On the possible clash of interests between the business dealings of the large conglomerates and the editorial independence of newsrooms, I have two points on offer:

 

1. It’s not that all of the the current lot of media companies are squeaky clean and honest. The roster of newspapers indulging in paid news reads like a Who’s Who of Indian media. There are biases which do come in and advertisers often exert pressure and threaten to pull out ads if there are negative stories

2. The Reliance Industries move of setting up a trust to further its interests in the media is a healthy sign and if it works and is truly independent could lead the way of other business groups entering the media.

 

I hope the Mukesh Ambani foray sees more big business invest in the media. It will be good for the financial health, lead to more jobs and, Inshallah, better salaries.

 

Tomorrow: More about the Media and Big Business and the Prime Minister’s speech on Monday

 

Buzz me if you have a story to tell and gossip to share. Confidentiality assured. Andar ki baat will stay under. There are various ways you can reach me: pradyumanm[at]mxmindia.com, BBM @ 23050B5D, Whatsapp/Gtalk pradyumanm[at]gmail.com, @pmahesh, 98338 76278.

 

Disclaimer: Although Pradyuman Maheshwari is CEO of MxMIndia other than being editor-in-chief, he chucks those hats while writing Mediaah! So, the views expressed here are entirely his own and not those of the website and the team that runs it (especially the National Sales Head!).

 

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One response to “Mediaah!: Why Mukesh Ambani’s Network18 foray is good news for the Indian media”

  1. Tarun Nangia says:

    I share your optimism, entry of biggies in the sector will give media companies, specially news media, the much needed financial stability that many of them do not have.

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