US-based media conglomerate Viacom Inc has received approval from the Foreign Investment Promotion Board (FIPB) to acquire 50 per cent equity stake in Prism TV Pvt Ltd, which runs five regional language general entertainment channels—ETV Marathi, ETV Gujarati, ETV Kannada, ETV Bangla and ETV Odia.
Viacom, through Nickelodeon Asia Holdings Pte Ltd (Singapore), will acquire the stake held by Shinano Retail Pvt Ltd, an arm of Mukesh Ambani-controlled Reliance Industries Ltd, by shelling out about Rs 940 crore (approximately $150 million).
For the financial year ended March 31, 2015, Prism TV posted revenues of Rs 343 crore compared with Rs 270 crore in the previous year. Its net loss, however, widened to Rs 13.47 crore from Rs 12 crore in the same period.
Following this transaction, Prism TV is expected to be merged with Viacom 18 Media, which houses the entertainment channels of the group, including flagship Hindi general entertainment channels (GECs) Colors, youth channels MTV and Pepsi MTV Indies, English channels VH1 and Comedy Central and kids channels Nick, Nick Jr and Sonic.
The five ETV regional channels are to be rebranded as Colors Marathi, Colors Gujarati, Colors Kannada, Colors Bangla and Colors Odia as part of this.
Viacom operates in India through Viacom 18 Media Pvt Ltd, 50:50 joint venture between Viacom Inc and TV18. The JV was formed in 2007, when TV18 as a group was promoted by Raghav Bahl, to launch television channels and foray into film production and digital media services.
In 2012, TV18, then promoted by Raghav Bahl, entered into a complicated deal with RIL under which TV18 agreed to acquire Equator Trading Enterprise Pvt Ltd, a Mukesh Ambani-controlled entity, which held stakes in Hyderabad-based ETV Network’s regional news channels through three separate group firms.
Under the deal, TV18 agreed to acquire Panorama Television which held 100 per cent stakes in ETV Rajasthan, ETV Bihar, ETV Madhya Pradesh, ETV Uttar Pradesh and ETV Urdu and also bought 24.5 per cent in ETV Telugu and ETV Telugu News.
TV18 also bought 50 per cent stake in Prism TV Pvt Ltd, owner of ETV Marathi, ETV Bangla, ETV Gujarati, ETV Kannada and ETV Oriya with an option to buy the remaining 50 per cent.
Interestingly, the three-year deal between Bahl and Reliance Industries was structured in a way where Reliance itself bankrolled Bahl and the Network18 group to buy the string of ETV channels owned by it. Last year, Reliance moved to convert those loans into equity thereby taking control over Network18 and TV18.