| Sahara's bouquet of six news channels are
sinking in losses of around Rs 1 billion a year, a source close to
the company says. "Ernst & Young has been appointed to come
up with recommendations for restructuring the operations. There is
no mandate to find an investor. Clearly, the whole exercise is to
make the venture profitable," he adds.
The Hindi news space is dominated by four channels (Aaj Tak, Star
News, NDTV India and Zee News) which together garner close to 70
per cent market share in viewership, making the fragmentation at
the lower end among several players tough for Sahara Samay Rashtriya.
And it is not just the national news but also the region and city-specific
channels (Sahara Samay Mumbai, Sahara Samay Bihar & Jharkhand,
Sahara Samay Madhya Pradesh & Chattisgarh, and Sahara Samay
Uttar Pradesh & Uttranchal and Sahara Samay NCR) that are struggling
to stay profitable.
According to the source, Ernst & Young has recommended a revamp
of the business in the areas of operations, ad sales and content.
Each channel should have a business head whose role should be properly
defined, the consulting firm has suggested. The operations should
also be streamlined and structured for more efficient running.
Under the existing structure, each of the six channels has an ad
sales head who reports to a three-member core committee. Since mid-2006
Sahara has done away with a national ad sales head. The distribution
team also reports to this committee.
"Ernst & Young has made a presentation of its recommendations
recently. It has not yet been decided what Sahara would adopt,"
the source says.
Earlier, Ernst & Young had submitted a valuation report on
Sahara One Media & Entertainment Ltd, the company that runs
the Hindi general entertainment channel Sahara One and the motion
pictures business. Later in April 2006, NRI businessman C Sivasankaran
acquired 14.98 per cent stake in the company for Rs 1.2 billion.
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