Mediaah! Sad that one more small giant got gobbled up

03 Apr,2012

By Pradyuman Maheshwari

 

Yes, it’s great to hear of deals happening in the Indian media. It’s nice to know that the Chhajlani and Sethia families of Nai Dunia are getting significant value for their newspaper (and all in cash, I learn). It’s also good to see the Dainik Jagran group turn into a ‘huger’ force to reckon with.

 

But it’s indeed sad to see one more regional superpower sell out.

 

Others have done so in the recent past. Vijaya Karnataka, a very successful newspaper group in Kanataka sold to The Times of India group. Mid-Day sold to Jagran two years back and now Nai Dunia’s gone.

 

Jagran has made its plans known on acquisitions. In fact it is mandated by its investor benefactors that it must grow inorganically. So rather than set up operations afresh, it’s buying smaller superpowers. In fact soon after the Mid-Day deal, director Shailesh Gupta had indicated to me that there will be more announcements coming soon.

 

Rumours of buys in Orissa, Assam and Nai Dunia have been doing the rounds for over a year. There have also been a couple of papers in the Hindi belt that could be up for grabs if the price is right.

 

It’s indeed unfortunate to see the owners of smaller players like Mid-Day and Nai Dunia having to sell out. In fact after the Jagran deal, Tariq Ansari told me three things in an interview in Impact magazine:

  • I am a big believer in the newspaper business but there are significant challenges: delivery is a challenge, younger people not reading newspapers is a challenge, volume share of the advertising pie is a challenge and I think that any small newspaper company needs to look at these challenges and think how it’s going to get around them…
  • I hate to admit it but I must say that this is the conclusion that I’ve reached, in the last two years when there was a slight drop in the economy, the small newspapers got clobbered. If you don’t have the resources to weather that kind of storm, to invest in things you need to, I think it’s rough going
  • The problem with raising money is that your investor wants to know where am I going to put this money when I get a hundred per cent returns. The way the newspapers are going to be in the next five years, to my mind, you are not going to be able to guarantee those returns. You need to have somebody who believes in newspapers, understands newspapers…

 

Tariq Ansari admitted that his spends on the outdoor business were possibly a mistake. Chhajlani may also find that in retrospect his investments (in monies and mindspace) on NewsX wasn’t the right thing to do.

 

But my own sense is that to be able to fight a big player requires a rigour that both groups didn’t have when required. (for Mid-Day: the competition from Hindustan Times, DNA and Mumbai Mirror and for Nai Dunia: Dainik Bhaskar and Rajasthan Patrika)

 

I haven’t been able to speak with Vinay Chhajlani since yesterday’s announcement. But will do so, as I did after he acquired NewsX along with Jehangir Pocha. NewsX has been on the block for a bit, and although Web Dunia is a successful enterprise, I won’t be surprised if that also goes out to an international giant. Vinay Chhajlani will reinvent himself and possibly do what he’s best at: running a software enterprise with systems and processes.

 

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One response to “Mediaah! Sad that one more small giant got gobbled up”

  1. Prriya Raj says:

    Dear Pradyuman:

    Nice to see your mediaah column. You have mentioned about the regional media. Would you also like to tell us something about ‘National Dunia’. I think, it was wonderful for Alok Mehta to start a newspaper in a day’s time.

    Cheers!

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