The Reliance Group, led by Anil Ambani, is all set to exit the media and entertainment business. The group, instead, has decided to focus on two key areas -- financial services and defence alongside its interests in telecom and power sectors. The decision to exit media and entertainment sectors is not sudden and comes after a long deliberation and plans drawn in 2013, say company insiders.
The group is in talks with Subhash Chandra-owned Zee Entertainment Enterprises Ltd (ZEEL) to sell its radio and broadcast business housed under Reliance Broadcast Network Ltd (RBNL). The Economic Times reported on Saturday that a final decision on the deal is likely by the end of this month.
The deal, which is being brokered by group firm Reliance Capital, includes ZEEL acquiring a 49 per cent stake in the radio business, which operates as 92.7 BIG FM, apart from 100 per cent buyout of the television channels. The size of the deal is being pegged at Rs 1,500-2,000 crore.
The radio business cannot be completely sold yet because of a regulation that prohibits private FM operators who bought fresh radio frequencies last year from selling more than 49 per cent stake till 2018. Both ZEEL and RBNL executives said Zee will acquire 100 per cent of the radio business after the three-year lock-in period.
ZEEL's buyout of RBNL, if successful, will complete its entertainment bouquet that currently lacks the radio business. Owning BIG FM will give it a leading position in a sector where it currently is not even present.
A senior executive at ZEEL said the group was not particularly interested in RBNL's TV channels but RBNL wouldn't sell the radio business alone and is offering TV stations as a "package" with the radio stations.
When contacted, both ZEEL CFO Mihir Modi and RBNL CEO Tarun Katial refused to comment.
RBNL operates two television channels – BIG Magic, a comedy-centric Hindi general entertainment channel, and BIG Magic Ganga, a regional channel, catering to viewers in Bihar, Jharkhand and Purvanchal.
Under BIG FM, the company runs 45 radio stations. Last year, during phase 3 auction of radio frequencies, the network spent Rs 116.9 crore to acquire 14 new frequencies. This took the total number of its stations to 59.
Reliance Group has been gradually exiting the media and entertainment business over the past two years. In January 2014, RBNL dissolved its joint venture with the Los Angeles-based CBS Studios International. The company shut down the three channels - Big CBS Prime, Big CBS Love and Big CBS Spark - it had launched in India between 2010 and 2011.
In July 2014, it terminated a joint venture with European television company RTL under which it operated the Big RTL Thrill channel, which was launched in October 2012. In August 2015, Reliance MediaWorks Ltd under RBNL completed the sale of its multiplex business to Carnival Cinemas for Rs 700 crore.