New Delhi: Sameer Manchanda, who helped set up Global Broadcast News Ltd (now IBN18 Broadcast Ltd) in 2005 with Rajdeep Sardesai for Raghav Bahl-promoted Network18 group, has stepped down as joint managing director of the company that operates television news channels CNN-IBN and IBN7.
Bahl, founder and managing director of Network18, which runs a bouquet of business and entertainment channels, has in turn exited from the board of DEN Networks Ltd, a cable distribution firm established by Manchanda.
Both the companies told the stock exchanges that the exits come into effect immediately.
Although Manchanda and Bahl are parting ways after five years of working together, Haresh Chawla, group chief executive officer of Network18, underplayed the development.
“We are still friends,” he said.
Manchanda, chairman and managing director of DEN Networks, said he decided to quit IBN18 as he needs to focus on his cable company.
“A sunset date for digitization of cable has been recommended by Trai (Telecom Regulatory Authority of India) and cable has huge room for growth,” he said.
DEN Networks was launched in 2007 with the help of Bahl and IL&FS, an Indian listed private equity firm, with an initial funding of Rs 300 crore.
Bahl holds 6-7% equity in DEN, while Manchanda has close to 4-5% share in IBN18.
In the fiscal ended 31 March, DEN reported a revenue of Rs 925 crore and expects revenue of Rs 1,100 crore by the end of the current fiscal.
Although Manchanda declined to discuss future plans at his firm, he did not rule out roping in foreign investors.
In 2008, DEN formed an equal joint venture with STAR Network for distribution of channels for the STAR bouquet as well as for other broadcasting houses.
The conflict between Manchanda’s company and TV18 was probably triggered when the latter formed a distribution venture with Sun TV called Sun18 to distribute 33 channels, including Network18’s Hindi entertainment and news channels Colors, MTV, CNBC-TV18, CNN-IBN and VH1, a media analyst said on condition of anonymity.
In Sun18, the business was structured into two parts—Sun18 Media Services (North) and Sun18 Media Services (South). While Sun18 South is operated by the Sun Network, Sun18 North is managed by the Network18 Group and headed by Chawla.
Manchanda did not comment on Sun18, but admitted there was a “conflict of interest and overlap.”
It was a coup of sorts in the broadcasting industry in 2005 when Bahl managed to win two NDTV stalwarts Manchanda and Sardesai to his side to launch CNN-IBN, TV18’s English news channel. According to the group’s website, Manchanda played an important role in starting IBN18 in partnership with Network18.
A chartered accountant by training, Manchanda was closely associated with NDTV since 1988. He was financial adviser to the firm and struck several deals for NDTV, including those with channels owned by Rupert Murdoch in India. Later, when the tie-up with Murdoch’s company was called off, Manchanda was instrumental in helping NDTV promoter Prannoy Roy to secure funds for setting up NDTV’s own broadcasting business.
According to a former NDTV executive, Manchanda was involved in all cable distribution deals while he was at NDTV. “He not only learnt the intricacies of the cable distribution business, but also leveraged his knowledge, as is evident from the success of DEN,” the official said, requesting anonymity.
According to a recent report titled India’s Super Rich 2010, which was published by Businessworld magazine, Manchanda owns a 53.70% stake in DEN Networks. This, with his investments in IBN18, pegs his personal wealth at roughly Rs 1,500 crore.
“Sameer Manchanda’s exit might have an impact on the overall IBN18 group because somewhere it was he who was instrumental in garnering funds for the company at critical junctures,” said a media analyst with a brokerage firm, who also declined to be named.
Abhilasha Ojha contributed to this story.