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NDTV | The outlier in a noisy TV news space

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Channel that has played a role in modernizing Indian TV reporting and has never shied away from taking critical stances on the government could soon be controlled by the Adani Group

Channel that has played a role in modernizing Indian TV reporting and has never shied away from taking critical stances on the government could soon be controlled by the Adani Group

Just hours after a unit of the Fitch Group, CreditSights, released a report that called the Adani Group “deeply overleveraged” and that the group’s “overambitious debt-financed growth plans could… spiral into a huge debt trap,” Adani Group, in an independent press release, said it had made an offer to take over NDTV by first indirectly acquiring a 29.18% stake and then making an open bid for another stake. 26% in the media entity.

NDTV is one of India’s best-known media brands, with its flagship NDTV 24/7 being something of a pioneer in the English-language television news space, its website NDTV.com being the one of the most widely read English language news websites and some of its current sites and former anchors being well-recognized public figures. In a survey published in the recent Reuters Institute Digital News Report for 2022 – whose respondents were predominantly English-speaking online news users in India – NDTV Online polled the highest weekly usage, and while the channels of 24-hour television news were perceived by survey respondents to be less reliable than its print counterparts, NDTV ranked first among Indian television channels.

It’s ironic that CreditSights’ warning to the Adani Group that a debt trap could leave some of its businesses in distress was exactly how a similar situation played out for the media entity after a series of financial dealings by NDTV promoters led the company into the financial slump of the late 2000s and early 2010s.

cluttered space

TV news in India today is a crowded space with several English-language news channels – many of whom cut their teeth at NDTV – and the news industry model has also changed a lot from what it was when NDTV pioneered the modernization of television reporting in India. . NDTV was started in 1984 by Radhika and Prannoy Roy, first as a production house of news programs mainly for the monopoly television network and the state-owned company Doordarshan before becoming a news network commercial in 1988. Radhika Roy made a career out of journalism with runs. in the Indian Express and India today before co-founding NDTV, while Prannoy Roy worked as a macroeconomist at the Delhi School of Economics with a special interest in psephology after obtaining his doctorate from the same institute in addition to being a chartered accountant.

NDTV’s best-known offering in the late 1980s on Doordarshan was “The World This Week”, a news program that reported and analyzed world events. Soon, NDTV continued to produce specials related to election coverage and analysis, budget specials, and then aired a daily news bulletin on DD Metro. These shows have been praised for bringing a journalist-focused focus and production values ​​of an international standard – with live (or near-live) dispatches from reporters, graphics and the use of images and video. of files. This was a stark contrast to the more staid, desktop-read newscasts published by Doordarshan and soon NDTV’s model of news gathering and presentation became popular, transforming television news.

NDTV then launched a 24-hour news channel in partnership with Star India in 1998 before branching out as an independent broadcaster in 2003. It followed a strategy of recruiting talent with family ties to the establishment – bureaucracy, military policy, etc. Apart from being reporter-focused in its news gathering and presentation, the channel also promoted its presenters who earned enough mileage and attention, becoming the faces of the news network. Some of these presenters – Rajdeep Sardesai and Arnab Goswami – quickly branched out into new news networks as ‘star’ editors and presenters, others like Barkha Dutt stayed on for a few years before leaving while some like Sreenivasan Jain, Sonia Singh and Vishnu Som continues to perform its line work.

The larger-than-life promotion of presenters as arbiters of information has had its own set of consequences: NDTV presenters, with the exception of other news outlets, have been accused not only of being close of the establishment, but to use it to undermine reporting on the inner workings of the newspaper. link between government and corporations as revealed by the subsequent release of the Radia Tapes and its aftermath.

NDTV’s expansion between 2003 and 2008 – with the launch of the news channels NDTV India (Hindi news), NDTV Profit (business news) – also came at a time when it no longer held a dominant position in the English and Hindi news space with more channels in the fray and NDTV’s foray into lifestyle and entertainment channels, NDTV Good Times and NDTV Imagine, were attempts to create new brands to finance the information operation. The expansion was aided by investments from banks such as Morgan Stanley. But the financial costs of information operations had also risen dramatically for the company, which was publicly traded in the early 2000s.

The promoters’ decisions to buy back shares came at an inopportune time as the stock market crashed during the 2008 global financial crisis, with NDTV’s share price also falling. This led the promoter/founder to resort to a series of deals which began with securing a ₹501 crore loan from Indiabulls in July 2008, a ₹375 crore loan from ICICI Bank to repay Indiabulls in November 2008 and a total of ₹403.85 crore in two tranches (in August 2009 and March 2010) of Vishvapradhan Commercial Pvt. ltd. (VCPL), an entity indirectly controlled by Mukesh Ambani’s Reliance Industries, to reimburse ICICI. VCPL’s loan agreement resulted in the promoters transferring part of their shares to a holding entity Radhika Roy Prannoy Roy Holding (RRPR) such that RRPR owned 29.18% of NDTV and enabled VCPL to acquire 99.9% of the capital of RRPR, through the conversion of warrants, in the event that the loan is unpaid. This decision allowed the “hostile bid” of the Adani Group to take control of NDTV almost a decade and a half later.

Revenue model

NDTV’s expansion into new forays had begun to hurt its finances and its revenue model – heavily reliant on advertisements – in a crowded TV news market had also begun to provide diminishing returns. A prolonged period of financial decline was reflected in the company’s stock prices and market capitalization, which fell significantly in the mid-2010s.

With a TRP TV ratings model, later found to be flawed, governing ad placements, NDTV no longer remained the preferred destination for advertisements. Meanwhile, the rise to power of the Bharatiya Janata Party in 2014 has also changed the nature of the public discourse favored by TV stations, apart from its focus on news operations as well.

Today, the prime time offer of English news channels is limited to studio “discussions” and polarized “debates”. General news reporting hardly presents in-depth investigations or coverage of livelihoods issues or broader, deeper trends in political economy, international affairs or public policy in news channels in English, as was the case in the 1990s. More visibly, India’s predominant television news media channels have undergone accelerated ‘foxification’ – the imitation of the controversial American news channel Fox News.

NDTV has sought to remain among a number of exceptions to this rapidly diminishing trend. Financially, years of cutting costs through a reduction in the size of the workforce and scale of operations in addition to a thriving digital operation have allowed it to recover. In the 2020-21 financial year, NDTV achieved revenue of ₹357.63 crore and profit of ₹74.86 crore, but these figures also reflect the size of the group’s operations, the peak of which dates back more than ten years.

Adani Group has now purchased VCPL from its current owners, Mahendra Nahata (a Reliance Group associate) from HFCL Group, reportedly for ₹113.74 crore (much less than the ₹403.85 crore which was loaned by VCPL to NDTV ) and immediately exercised the warrants to acquire the stake in NDTV and launched an open offer to acquire a majority stake.

Adani Group’s rise as a leading and diversified business entity coincided with the rise of former Chief Minister of Gujarat and current Prime Minister Narendra Modi and its promoter’s closeness to the current government of Gujarat. the Union is well known. It has now embarked on a quest for majority control of what remains one of the few independent television and digital media groups in the country that is willing to take critical stances on the incumbent government, leading NDTV to face an uncertain future.