MUMBAI: Until now rumours were rife that news and information provider Reuters Group Plc was picking up a 26 per cent stake in the soon to be launched English news and current affairs channel from the Times of India stable. Reuters confirmed early this morning that the agreement has finally been inked.
Reuters said in a statement it would take a 26 percent stake in The Times Global Broadcasting Co. Ltd (the Times’ news channel has been hived off into a separate company and will not be a part of Bennett, Coleman & Co). According to information available with Indiantelevision.com, the deal was signed on 20 April.
While the financial aspects of transaction remain a matter of speculation, a report put out by moneycontrol.com quoting news wires says Reuters' 26 per cent stake in the Times channel has been valued at $20 million (Rs 900 million). If this be the case, then the total valuation of Times Global Broadcasting stands at just below Rs 3.5 billion (Rs 3.46 billion to be exact).
The news channel will be the second from the TOI's stable after it launched a lifestyle channel - Zoom - in September last year. Reliable industry sources say that hiving off the Times’ news channel into a separate company will facilitate skipping over various procedural hurdles when government permission is sought for the Reuters investment.
Reuters Media president Chris Ahearn said, "Reuters has been doing business in India for almost 140 years and is synonymous with trusted, independent and accurate information. Working with the Times Group in this way enables us to enter India's dynamic broadcast industry and reach its rapidly growing, information hungry, audience. This investment marks an exciting new chapter for our media business in India and is a key step in growing our global direct to consumer business."
The Times of India Group managing director Vineet Jain said, "We have built our heritage and standing with generations of Indians the world over through our flagship newspaper. This television channel is the natural next step in offering our news to a rapidly growing and discerning urban audience. This is a great coming together of two of the world's strongest news brands."
In the race for a deal with the TOI group for the television venture were also the likes of the British Broadcasting Corporation, which already has an existing memorandum of understanding for bringing out specialty and niche magazines. What swung the deal in favour of Reuters is still not clear, but it’s being estimated that more than Reuters financial muscle, it was the company’s widespread offering that tilted the balance in its favour.
The Times’ news channel will be needing technology and global resources to source news and Reuters fits in very well with the whole scheme of things. The English news and current affairs channel, due to launch later this year, will be a pay channel and could also be packaged with some Reuters services offered to Indian customers, apart from being made available on cable networks and, probably, on DTH platforms.
Reuters, in their statement, said that the news channel's revenues would come from subscriptions and advertising.
Times Group president Arun Arora said, "It has been an absolute pleasure dealing with the Reuters senior management. Like us, they are driven by their passion for news. This is, therefore, not just a deal, but a meeting of minds to set up a great business."
Times Global Broadcast Co. Ltd CEO Sunil Lulla added, "The Times Group and Reuters will enable the channel to access the best of content and practices, within India and across the world. We believe this partnership will help build a differentiated offering with depth and width, to our potential audiences and customer."
In a chat with Indiantelevision.com last week, the channel's vice president news and editor television division Arnab Goswami had said that the channel will be laying strong emphasis on global news. Hence, now as the deal is concluded, the new channel will include Reuters branded programing from across the globe. Reuters has five bureaus in India.
Reuters, a global information company, provides information tailored for professionals in the financial services, media and corporate markets. Although Reuters is one of the world’s best-known international multimedia news agencies, more than 90 per cent of its revenue is derived from financial services business. Some 330,000 financial market professionals working in the equities, fixed income, foreign exchange, money, commodities and energy markets around the world use Reuters products. They rely on Reuters services to provide them with the information and tools they need to help them be more productive. Apart from that, Reuters open technology, based on industry standards, enables customers to search, store and integrate our information with content from other sources, facilitating the way they work
The agreement between Times and Reuters is subject to regulatory approvals and contract. The financial advisor on the agreement are Lazard India for Reuters and JM Morgan Stanley for Times of India Group.
As the English news channel space hots up, to use a cliché, time alone will tell who stays ahead in the race.
