Financially, the investment made by an arm of Rupert Murdoch's media conglomerate News Corporation in Hathway Cable & Datacom Ltd, can best be described as a dud. Asian Cable Systems Pvt Ltd picked up a stake in the Indian cable television and broadband services provider for Rs 342.72 crore in September 2000 and has now sold it for Rs 358 crore. 

This implies a mere 4.4 per cent return in absolute terms for an investment made over eleven and half years ago. Adjusting for inflation, it would tantamount to an investment loss. This, even as other investors bet on the company much later and make quick bucks and exited with relatively better returns().

Asian Cable Systems' average investment cost was Rs 139 per share. Seven years after News Corp invested in the cable company, in May 2007 Hathway allotted shares to private equity firm ChrysCapital at Rs 162. 

The shares of Hathway were listed at Rs 240 in February 2010 and have been trading at a discount since then. The share price of Hathway closed at Rs 173.25 on Tuesday, down 3.51 per cent even as BSE was up 1.28 per cent.

The deal, which saw Providence Equity Partners and Australia's Macquarie Bank buy News Corp's stake, could be looked at as an exit from non-core assets. News Corp is primarily involved in content creation and not distribution, even as it holds stake other content distributors too.

An email sent to News Corp spokesperson on the reason for the stake sale did not elicit any response at the time of filing this article.

Its local arm Star India already holds 30 per cent stake in direct to home (DTH) service provider Tata Sky, which it increased 2010. Besides it also formed a 50:50 joint venture with Hathway’s key rival Den Networks for the distribution of TV channels and services in India under Star DEN.

Last May, STAR DEN Media Services formed a 50:50 joint venture with Zee Turner Limited, a joint venture between Zee Entertainment Enterprises Ltd and Turner International Private Limited, for jointly distributing channels and services of the two entities across India.

The joint venture company is called Media Pro Enterprise India Private Limited and commenced operations from July 2011. This venture brought together 73 pay TV channels and services from the erstwhile Star DEN and Zee Turner bouquets under the same umbrella.

Given this background it is natural for News Corp to look at an exit from Hathway. But, to be fair, the group could have made up on the implicit financial loss on the old investment through a strategic push to reach cable television homes for its bouquet of channels.

Indeed, when it had invested in Hathway, Den Networks did not exist and the investment could have helped Star’s channels compete against Zee controlled Siti Cable.

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