Mumbai, Jan 22 (): Minority stakes totalling 19% in Asianet group of channels would be acquired by Star India Ltd owned by Rupert Murdoch’s News Corp.
Star already has the majority of shares in these South Indian channels which include two Asianet general entertainment channels (GECs) in Malayalam and Star Vijay in Tamil.
News Corp. has on a policy basis over the past year has been buying out partners in some joint ventures and if not possible to d, they are exiting by selling out in others. In 2009, Star bought a majority stake in the Asianet channels for $235 million in cash and picked up a debt of $20 million as per company filings.
In Malayalam it has Asianet and Asianet Plus, Asianet Suvarna in Kannada and Sitara in Telugu controlled by Star and recently launched Asianet Movies, a 24×7 movie channel in Malayalam.
Except for the Malayalam channels, Kannada Survarna and Star Vijay are in the second spot while Sitara is running at a loss. Star Vijay with its niche programming and acquisition of high value films has shot up its value to be next to Sun TV but still the gap between the two is wide.
The reason for Star to buy minority shares is to strengthen its Southern channels which can be done only if they have complete control over Asianet to take decisions to strengthen Star’s position in the segment. According to those in TV industry, Star’s southern channels contribute about 15% of overall revenue, which includes advertising and subscriptions.
Sun Network is the main rival of Star’s southern channels. Star-ESPN, a JV with Walt Disney and Star Sports was turned into a fully controlled Star unit after Disney sold 50% stake. Star had 26% stake in the Bengali channels with Ananda Bazar Patrika (ABP) in a JV with Media content and Communications Services India Pvt Ltd which also managed Star Majha, the Marathi channel.
ABP refused to sell out and Star exited and now Bengali GEC is Star Jalsha and the Marathi GEC is called Star Pravah. It launched Bengali film channel Jalsha Movies.
News Corp. is ending its JV with home shopping joint venture in India with South Korea’s CJO shopping Co Ltd. FICCI report says regional advertising spend on TV rose by 15% which is higher than the national percentage and will only increase. Balaji Telefilms owned by Ekta Kapoor formed a JV with Star to produce content in regional south languages and launch channels for Star but it did not take off and Star walked out but took up a stake in Asianet.