In hindsight, it was remarkably prescient. Weeks ago, before investment banking became the subject of derision, Kishore Lulla, chief executive of Eros International, was explaining why he thought it prudent for the media group to hold fire on major acquisitions.
“The world is going through a very difficult phase and I want to really conserve cash at this minute,” he said, over tea and biscuits at his office in an industrial park in the west London suburb of Park Royal. “We are sitting on a golden goose. My company’s profitability is very high. You don’t want to be in that position when the world markets are really melting down. You don’t know what could happen—the world is very uncertain.”
Weeks later, amid the chaos in the global capital markets following the collapse of Lehman Brothers, Bank of America’s $50 billion (Rs2.3 trillion) acquisition of Merrill Lynch and the emergency bailout of the insurer AIG (American International Group) by the US Federal Reserve, the 46-year-old executive’s caution seems entirely appropriate.
Unassuming and low-key—the black Aston Martin parked outside the decidedly unglamorous, plywood warehouse housing the Eros office offered the only hint of the swagger usually associated with media barons—Lulla joined the company founded by his father Arjun before he had even graduated from law school in Mumbai in the 1980s.
Games people play: Lulla spends his weekends with friends, often over a game of chess. Jayachandran / Mint
He brought with him a clear vision of taking Indian cinema global and transformed his father’s model of buying films from India and selling them to various exhibitors by buying the film rights directly and building an international distribution network.
From that emerged several initiatives, including the establishment of a production company, the July 2007 acquisition of Ayngaran International, a Tamil film distribution company, and tie-ups with Sony Pictures and Lionsgate, the independent film production house.
In addition, Eros, which is associated with the hit films Om Shanti Om, Heyy Babyy and Namastey London, is poised to sign up Pharrell Williams, the hip hop and R&B superstar, as part of its bid to explore new avenues of growth.
Although Eros has its headquarters in the Isle of Man, London became the company’s executive base following the purchase of offices in Park Royal a decade ago. That status was consolidated in 2006 when the company became the first Indian media group to list its shares on the Alternative Investment Market or AIM of the London Stock Exchange.
However, Lulla is vehement that the company will focus increasingly on India, and shows no inclination to partake in the current frenzy of Hollywood deal-making by his peers, including the recent $500 million tie-up between Reliance Entertainment and Steven Spielberg’s DreamWorks.
“(Hollywood deals) are totally not of any interest to us,” he maintains. “Our strategy is totally different. India is a huge market for us. At the moment, Eros is cash generative, and Hollywood is cash burning, and there is a lot of risk involved with it.”
He pauses before adding that the level of deal activity is a clear signal that Bollywood has arrived as a global player, and that the future of the media industry will be the product of “cross-pollination” between Bollywood and Hollywood.
“India’s entertainment industry is on a high,” he says. “When you go to LA, the studios take you seriously. Ten years ago, major cinema chains used to look down on Bollywood films, as did Indian corporations. But now it’s so sexy.”
Seated at a rectangular conference table in his airy but unremarkable office complete with Ikea-style furniture, Lulla is soft-spoken and unfailingly courteous. He is dressed casually in jeans and a white shirt, and appears to function most effectively within the language of numbers as he earnestly presents his business plan and vision for the company in a rapid-fire release of figures.
“Our focus is on India. India is about a $15 billion industry today, and box-office admissions in 2007 were 3.2 million,” he begins. “There are 13,000 screens and 1,350 multiplexes. The average price of a multiplex ticket is $3 and the average price of a single-screen ticket is 50 cents. Therefore, I think you will see a big growth coming into the Indian box office and this is why we are tying up the content.”
Terms such as “content consolidation” and “vertical integration” pepper the conversation as he explains a key plank of Eros’ strategy: to invest heavily to secure a strong pipeline of releases in various Indian languages over the next few years.
Lulla adds that further growth will come from dubbing Hindi films into languages as diverse as German, Spanish and Thai, while the partnerships with Sony Pictures and Lionsgate will open up the indigenous British and American market to Eros. And, if all goes according to plan, says Lulla, these partnerships will also help find the Indian equivalent of Crouching Tiger, Hidden Dragon, the small budget Chinese film that became a blockbuster.
Away from financial matters, Lulla is more expansive as he talks about his closeness to his family and respect for his parents. He describes his relationship with his wife and two daughters—both of whom intend to follow him into the family business—as “entirely interdependent on one another”.
Contrary to many executives whose personal lives regularly come under scrutiny, he appears at ease with a casual discussion on life outside the office—revealing that St Tropez is a favourite holiday destination, Abba is among his top five music picks, and that his current choice of literature is books on spirituality. Surprisingly for somebody from the entertainment industry, Lulla claims to dislike large parties, preferring instead to spend time in the company of his “six or seven close friends”.
As our conversation draws to a close, Lulla shows me out. Outside his office is a cramped central space where desks jostle for space with stacks of DVDs and packaging. A crop of Indian employees, several of whom have been with the company for the better part of a decade, speak on the phones in Hindi. There is an industrious, if slightly dingy air, leaving no one in any doubt that the emphasis is on getting the job done, as opposed to accumulating the trappings of success.
It is a sentiment that filters through in Lulla’s views on wealth and philanthropy as the motivation for making money; he cites Bill Gates as the person he admires most for donating much of his wealth to charity.
“I want to create as much wealth as possible,” he says, “but I want to give it back. It is not about creating wealth for me and for the family. It is important to set an example and I think Bill Gates has done that.”
He adds: “India has so many billionaires and I would love to see them do that. It would do so much for India.”
Lulla refuses to disclose how much of the £206 million family fortune (according to the Sunday Times’ Rich List), has been donated to charity. “You should never quantify your donations; that is the beauty of it.”
He, however, adds that the family “secretly” supports a lot of charitable causes through a trust controlled by his father. He says he is aiming to reach a point in his career when he can give at least 80% of his time to the trust—setting his own example for nouveau riche Indian businessmen.
Born: 4 September 1962
Education: University of Mumbai
Current Designation: Chairman and chief executive
Work Profile: Lulla has worked with Eros International his entire professional life
Favourite Reads: ‘The Alchemist’ by Paulo Coelho, and anything to do with spirituality
Favourite Films: ‘Ben-Hur’, ‘The Dark Knight’, ‘Mamma Mia!’, ‘The Shawshank Redemption’
Method Watching: Lulla watches movies in a personal cinema room at his home in Park Royal, London
Hip Hop Dining: Lulla is good friends with triple Grammy-winning rapper Pharrell Williams and once, along with his wife, took the artiste and his girlfriend out for dinner