Network18 Buys ETV News & Entertainment Channels

NEW DELHI: Making a play for India’s lucrative regional channels business, Network18 is shelling out $400 million for the ETV portfolio of news and entertainment channels.

With the ETV deal, Network18 takes 100-percent control of the Hindi-language news channels ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Rajasthan and ETV Bihar, plus ETV Urdu channel. The company has also secured 50 percent of the general-entertainment channels ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati and ETV Oriya; and 24.5 percent of ETV Telugu and ETV Telugu News. The stakes were acquired from Reliance Industries Limited.

Network 18 and its majority-owned TV18 business have announced a rights issue to finance the ETV acquisition and working capital investments and to eliminate the companies’ debt. The transaction also allows Raghav Bahl, founder, editor and managing director of Network18, to retain 51-percent majority control over the two companies. Bahl secured the funding to acquire the shares from Independent Media Trust, established by Reliance Industries Limited, which is led by Mukesh Ambani. (Mukesh’s brother, Anil, runs Reliance ADA Group, the business that operates Reliance BIG and owns half of DreamWorks). As part of the transaction, Network18 and TV18 have inked a digital distribution deal with Reliance Industries Limited-owned Infotel Broadband Services. Network18 and TV18 channels will be distributed on the nationwide broadband network that Infotel is building.

"This is a truly seminal moment in the 18-year-old history of Network18/TV18," Bahl said. "By inducting such a significant amount of equity, our balance sheets will become among the strongest in the industry. Also, by acquiring this strategic control over several ETV Channels, TV18 will have a bouquet of leading television channels. Riding on the imminent digital wave, I am convinced that this acquisition is a significant move which will catapult TV18 into the forefront of India’s broadcasting industry. The proposed preferred access arrangement with Infotel Broadband will ensure that our content and services will be available on India’s premier technology distribution platform, with the widest catchment of high quality consumers across the country. Further, on a debt free basis, both Network18 and TV18 hope to strengthen their position in various media segments like news and entertainment broadcasting, consumer internet, digital and print publications, filmed entertainment, home-shopping, e-commerce and other emerging businesses."