Who will be ‘extraordinary together’ with Zee?

15 Nov,2018

 

By A Correspondent

 

In October 2017, the Zee group unveiled its new corporate identity. Extraordinary Together was to be the new credo.

 

While making the announcement on Zee’s new corporate brand ideology last year, Punit Goenka, MD & CEO, ZEEL had said: “Our Chairman, Dr. Subhash Chandra’s vision and pioneering efforts caused a revolution in the country 25 years ago. Over time, Zee has evolved from a television broadcaster into a media and entertainment conglomerate with businesses spanning across the spectrum, from broadcasting to music, movies, digital, live entertainment and theatre, providing an extraordinary range of entertainment to audiences around the world. Our new brand ideology – ‘Extraordinary Together’ is rooted in the philosophy that from collaboration comes strength to deliver the extraordinary. In a global company like ours with interests across diverse verticals and businesses, we believe that our ability to win lies in us being able to effectively come together and harness this strength to be extraordinary in the market.”

 

Chairman Subhash Chandra is known to be a man in a hurry to achieve his goals. And realising that the content-led broadcast play could be a cul de sac, if not merged with technology, he and his family took this significant decision that has indeed sent the market aflutter – not just M&E and M&A but Corporate India as well.

 

So as the world was just done with Diwali, Subhash Chandra and family along with its advisors met in Mumbai over the Diwali weekend to undertake a strategic review of its businesses in view of the changing global media landscape. The strategic review underscored the importance of technological advancements such as AI, lOT, 3D printing AR, VR and many more. It was observed that these developments will impact virtually all businesses across sectors and business practices will be driven by technological innovation.

 

The review showed that the family needs to accelerate efforts to stay ahead of fast changing trends. The review noted that with the current 1.3 billion viewers and close to 50 million digital viewers growing at a fast pace, ZEEL is well placed to benefit from current market trends due to its strong brand & bouquet of domestic & international channels. Adding to that strength, Zee5 will further enable the company to leverage the benefits of changing video consumption trends, contributing significantly over the coming years.

 

Speaking on where the business stands today, Jawahar Goel said, “Punit and Amit have made the right sustainable investments for the future and the business is growing ahead on all fronts in a focused and disciplined way.”

 

A communique issued notes: “On its own, ZEEL would remain a leader in both linear and digital distribution. It has the consumer insights and knowhow to produce and deliver content for the South Asian diaspora globally. The management depth the Company has built over last two decades distributing content globally in 12 foreign languages puts the Company in a unique position. It has strong revenue streams including advertising and subscription – domestic and international. However, there is recognition that a right global strategic partner will help in transforming ZEEL further, and maximise long term value. It will transform it into a global media-tech player with a unique offering of content to the main stream audiences in 170-plus countries putting it into A KING POSITION globally. It has been decided to undertake a strategic review of Essel’s shareholding in ZEEL with a view to maximise value for the business. The proposed transaction to divest upto 50% of Essel’s holding to such a partner, is expected to address the Essel Group’s capital allocation priorities and will allow ZEEL shareholders to capture the full value of India’s largest entertainment broadcaster with an ever strengthening bouquet Essel has decided to appoint Goldman Sachs Securities (India) Ltd. as their investment banker and US and Europe-based LionTree as an international strategic advisor for this exercise. Essel expects the outcome of the strategic review to be concluded by March/April 2019. We hope that this transaction will meet the objectives of the Essel Group as well as the minority shareholders of ZEEL. India remains a priority market for Subhash Chandra and the Essel Group and the family believes that India is at the cusp of significant growth. The family will continue to invest in growth opportunities in India. Regardless of the outcome of this exercise, Essel is committed to create significant long term value in ZEEL and shall keep on contributing in every possible way going forward.”

 

The Zee management has had a Call with analysts and Goenka has also had detailed conversations with the business media on this latest gambit. Market analysts and observers MxMIndia  spoke have all been taken by surprise by the move. “Subhash Chandra is known to be master strategist and a maverick, but the decision to shed equity in the most profitable broadcast business in the country is a surprise,” said one analyst who has been tracking the company for over a decade. “However, Chandraji has foresight. Global trends are clear indicators that a content-only play has no long-term future. It has to be a marriage between content and technology. Even internationally, that’s where the wind is blowing.”

 

The question though the analyst we spoke with as well as others is whether the new suitor will be willing to play a junior role in Zee. “Anyone investing serious dosh will want to play a centrestage role in how the business is going to be conducted. In media, just a few seats on the Board aren’t enough.”

 

While Goenka said in an interview with CNBC TV18, that he’s happy to exit entirely and start life anew, that’s possibly not the route that global players are looking at. “They realise that only the Subhash Chandra family can run such a lean, mean and successful enterprise. They will want them to continue to drive the business at least in the short run. While technology requires the money, content requires an acumen that Zee has in plenty,” said one more analyst, again speaking on anonymity.

 

Extraordinary Together is indeed an appropriate credo for the state of things to come.

 

 

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