Star India, a unit of 21st Century Fox, has acquired the entire broadcast business of Maa Television Network Limited (MTNL), which has four Telugu entertainment channels, for an undisclosed amount.
Sources, however, told Business Standard that the deal size could be around Rs 2,500 crore. Till now, the promoters of MTNL were estimated to have invested over Rs 130 crore in the network.
Maa TV, which commenced its operations in 2002, was taken over by Nimmagadda Prasad, an entrepreneur who had earlier sold Matrix Labs to Mylan, and his associates in 2007.
The acquisition gives Star access to about Rs 2,000-crore Telugu television market, the second largest regional market in India in terms of revenue potential. So far, Star did not have a Telugu channel under its fold.
MTNL’s four channels are Maa Gold, Maa Music, Maa Cinema and Maa general entertainment. Last year, according to the company chairman Nimmagadda Prasad, Maa broadcast network stood 16 in all India ranking and number one in Andhra Pradesh and Telangana with a 27 per cent market share.
“The acquisition fills a vital gap in our portfolio allowing our advertisers targeted access to a critical market”, Star India chief executive officer, Uday Shankar, told media persons here on Wednesday.
The deal will come into effect upon complying with necessary regulatory formalities and the broadcast of Maa TV, including all its assets, will be integrated with the business of Star India.
However, the company, MTNL, will remain with its promoters- Prasad, actor-turned-politician, Chiranjeevi and his close relatives and actor, Akkineni Nagarjuna. While Prasad has 65 per cent share holding in the company, Chiranjeevi has 20 per cent, Nagarjuna 10 per cent and the remaining 5 per cent is held by retail investors.
“They (the promoters) did not want to part with the company. Therefore, we will takeover only the broadcast business. Maa brand and other assets will also come to Star”, Shankar said.
“The strategic decision to align with Star India and be part of a global media group will be a big leap in our efforts to take Maa TV Network to the next level and strengthen the positioning of Maa brand in the entertainment industry”, Prasad said.
Explaining the reasons for hiving off Maa TV after turning it into a profitable entity over a period of 6-7 years, Prasad said, “we don’t want to be unrealistic. When the time comes, it has to be handed over to a bigger, better entity”.
Shankar said that Star would not only retain the Maa TV brand but also its 500-odd employees. Besides it would invest more on development of talent and content. “The Telugu market is an important market. However, the pace of innovation is slow. We are keen to change this by acquiring a local presence and fundamentally changing the content quality paradigm”, he added.