MUMBAI / NEW DELHI: In the end the "bhadralok" from Bengal, Aveek Sarkar, held firm and had his way in the matter of how much stake his Ananda Bazar Patrika Group would hold in the reconstituted Media Content and Communications Services India Pvt Ltd (MCCS).
The agreement signed today between ABP Pvt Ltd and the Star Group gives the West Bengal-based media company 74 per cent and Star 26 per cent in the augmented paid-up equity share capital of MCCS. Sarkar will have to cough up Rs 750 million for his 74 per cent stake, which means MCCS is being valued at a little over Rs 1 billion.
The new joint venture company MCCS, which is responsible for the broadcast of Star News, has been formed to comply with the revised government guidelines for the uplink of news channels out of India.
Accordingly, the board of directors of MCCS is also being reconstituted. Information available with indiantelevision.com indicates that there will be six members on the MCCS board headed by Sarkar himself. Ravina Raj Kohli continues as president of Star News, as too Sanjay Pugalia as news director of the channel.
MCCS, which will probably be filing a fresh uplink application before the government on Monday, will now reportedly be doing so as an ABP Group company in which Star is the minority stakeholder. Additionally, companies that Star News was outsourcing from like Touch Telecontent (India) Pvt Ltd (for infrastructure support) and Rent Works Ltd, are reportedly to be merged with MCCS.
What will be the arrangement as far as Hughes Software Systems Ltd, which supplies newsgathering and connectivity-related equipment to MCCS, is not immediately clear. It is reasonable to assume that Hughes remains out of the ambit of this merger. It may be recalled that US-based Hughes Electronics (which is in the process of being bought over by News Corp) owns 55.44 per cent equity stake in Hughes Software Systems Ltd.
A question that arises is what happens to the former stakeholders in MCCS? While Vir Sanghvi is out of the country and former largest stakeholder in MCCS Suhel Seth was unavailable for comment (as too Hemendra Kothari of DSP Merill Lynch), indiantelevision.com did manage to elicit a response from Jeetendra, chairman of Balaji Telefilms. Jeetendra, who held a 5 per cent stake in the earlier restructured MCCS, said the shares he'd held had already been returned. Queried as to what the terms were, he said Star had repaid the nominal amount he'd put down for the shares.
Commenting on the developments ABP managing director A Lahiri said, "This alliance is in line with the ABP Group's strategy to get into the fastest growing media space from our traditional area of expertise, which is print media. Our partnership with Star Group will enable us to gain in terms of scope, scale and influence. In turn, ABP's 80 years of history and expertise in content making will add value to Star News."
Star India CEO Peter Mukerjea had this to say: "In ABP we found a strong media partner that shares our vision for Star News - providing Indian viewers, news that is unbiased and relevant to our country. We have great faith and confidence that a partnership such as this - of two leading media companies will be a stepping stone into a very positive future for our viewers, advertisers, cable operators and all stake holders."
Star News came into being in its current avatar in April after its content contract with Prannoy Roy's NDTV ceased. The Hindi news channel is headquartered in Mumbai, has a super bureau in Delhi and 19 regional bureaux across the country.
