Scripting a survival – the Hindu BusinessLine
From partnerships with Li Kashing and Rupert Murdoch in the 1990s to forming a joint venture with Sony Pictures, the pendulum has swung for Subhash Chandra of the Zee group – from a celebratory media baron to a satrap fighting for his life. survival. But in the real-life soap opera that took place in Zee’s boardrooms, the promoters were able to stick around to fight another day. Zee’s rise, fall, and survival could make for an exciting web series.
Originally from Hisar in Haryana, Chandra started out in the packaging and amusement park industry. In the early 1990s, he saw an opportunity to respond to an entertainment-hungry population that only watched state-owned Doordarshan, and partnered with global media conglomerate Star, then owned by Li Kashing, to launch Zee TV. It was a resounding success. Then, when Murdoch acquired Star, the bet was that Chandra would take Zee globally. However, the relationship deteriorated and in 1998 Chandra bought Star’s stake in Zee. But over the next ten years, he took the company to over 200 countries, making Zee a household name among Hindi and Indian speaking viewers. Building on this success, Chandra ventured into new areas including road construction, solar power and other infrastructure sectors as the Indian economy opened up.
Diversification turned out to be Chandra’s loss as the Essel Group accumulated debt. In 2018, the lenders were chasing Chandra, forcing her to put those assets up for sale and sell most of her shares in Zee.
In 2019, under duress from the banks, Chandra’s son Punit Goenka began talks with global media companies to sell more stakes in Zee Entertainment, though he was unwilling to relinquish control of the gem of the family. Comcast, however, wanted full control. Goenka, who unlike her flamboyant father, stays out of the spotlight, then went to Invesco Oppenheimer, who then held 8 percent in Zee. Invesco has agreed to buy an additional 11% stake and let Goenka continue to run the business. But over time, the investor’s patience ran out, which led to the special meeting of shareholders to discuss Goenka’s impeachment with the entire Zee board.
Twist in the plot
Goenka’s deal with Sony Pictures was a masterstroke as it not only eased Invesco’s challenge, but allowed Goenka to extend the Subhash Chandra family’s control over their business, despite only 3.9% of the company’s capital,
It comes even as Chandra’s brother Jawahar Goel is also fighting a similar battle to keep control of Dish TV. The coming weeks will reveal whether Goel can strike a similar deal as well.