News Corp owned STAR TV is forming a joint venture with Rajeev Chandrasekhars Jupiter Entertainment Ventures – STAR Jupiter Entertainment Television. STAR Jupiter will be a majority shareholder in Asiannet communications, reports News Corp owned Dow Jones Newswire. STAR will hold at least 51 percent in the venture, and STAR CEO Uday Shankar has told Indiantelevision.com that the news business will not be a part of the portfolio, since only 26% FDI is allowed in the News business. Murdoch wants to enter the news business – but is now interested only in businesses where News Corp will be a majority stakeholder. Asianet has been restructured into four companies – general entertainment, news, radio and media infrastructure, and it appears that STAR Jupiter will be involved only with the General Entertainment business to begin with.
The STAR-Jupiter deal had been reported by the Economic Times in August, around the time when Rupert Murdoch had visited India. One sensed that the deal had been done, when it was reported a few days ago that Asianet was looking to buy an English news channel, and a vernacular paper. During his visit to India, Murdoch had expressed an interest in the regional television space in India, saying that STAR will invest $100 million, and set up 6 channels.
, a Tamil General Entertainment Channel (GEC) owned and operated by STAR will be transferred to STAR Jupiter. STARs current portfolio
in India includes STAR Plus, Gold, One, Utsav, Cricket, Vijay, Movies, Jalsha, Ananda, World, News and Majha under the STAR brand, as well as Channel V, The History Channel, National Geographic Channel and Nat Geo Adventure. Star and Jupiter are also exploring a tie-up for film co-production by Fox Star Studios India and Indigo Movies, Jupiter Entertainment’s movie production arm.
The Balaji Saga
STAR has been in the middle of a bitter battle with Balaji Telefilms – a TV production company they had tied up with for regional content channels in India. According to a News Corp filing for Q1 2009 (pdf
), a couple of weeks ago, STARs operating income declined year-on-year despite an 8% revenue growth because of increase in Advertising and Subscription revenues in India – due to “the termination of the distribution agreement” which has cost them dear. As per recent reports, Balaji had the option of buying out STARs stake for Rs. 190 per share, but given that Balaji’s stock has dropped below Rs. 100, renegotiations might be in order. More on this deal at BS
Chandrasekhar, a Rajya Sabha MP for the JD(U), had picked up
51% stake in Asianet Communications in 2006, a deal estimated to be around Rs. 150 crores. Remember that he had sold
his stake in BPL Mobile to the Essar Group for over $1.2 Billion in 2005. Jupiter Entertainment is a subsidiary of his venture investment arm Jupiter Capital. Chandrasekhar has also invested in FM station Radio Indigo
. Chandrasekhar is looking to buy a vernacular newspaper (or perhaps regional English daily Deccan Herald
), and is reportedly in talks with
two English news channels – one in Delhi and the other in Mumbai.