Home / Companies / News /  Star India acquires Telugu TV channel Maa

New Delhi: Star India Pvt. Ltd, a unit of 21st Century Fox, on Wednesday announced the acquisition of Telugu television channel network Maa Television Network Ltd, as the company expands its presence in the movies and general entertainment genre across India.

The two companies didn’t disclose the value of the deal but Mint learns that it is around 2,000 crore.

The deal marks Star’s biggest acquisition in India and the company now has channels in six Indian languages. It also has a near-stranglehold over the sports broadcasting market in India.

Uday Shankar, Star’s chief executive, said the deal has been in the works for a year. “Star has been bullish about regional content for a long time. We have an extensive portfolio in regional content and Telugu was a critical gap which has been plugged now." 

Maa TV is Star’s second major acquisition , the first one being Asianet Communications Ltd in November 2008. Asianet operated three general entertainment channels in Malayalam, and two Kannada channels. Star completed the buyout in May 2014.

“Both Star and I are strong believers of the fact that content is most credible when in one’s own language," said Shankar in a phone interview from Mumbai. Star’s regional channel portfolio also includes Tamil, Bengali and Marathi entertainment channels. Regional channels contribute 25-30% to the broadcaster’s overall revenue from entertainment and movie channels, according to a senior executive at the company.

The Maa acquisition gives Star access to the Telugu TV market—the second largest regional market in India in terms of revenue, pegged at 1,800 crore a year according to company data.

The deal is subject to regulatory approvals and should be completed in the next three to four months, Shankar said.

Star’s purchase of Maa Television Network gives an exit to the company’s promoters—families of serial entrepreneur Nimmagadda Prasad, actor-politician Chiranjeevi and actor Akkineni Nagarjuna. Between them, they hold close to 100% stake in Maa TV, Nagarjuna said.

It wasn’t immediately clear whether Star would change the brand name, a household one in Andhra Pradesh and Telangana. “That is up to Star to decide. They will take a call after the regulatory clearances come," Nagarjuna said in a phone interview.

“We keep it flexible. Wherever adding the brand name adds significant value, we have made the change. But it’s not done by default; we study it on a case-to-case basis," said Shankar.

Founded by P. Murali Krishnam Raju in 2001, Maa TV has satellite telecast rights for about 700 films, a considerable number of them Telugu blockbusters. The regional broadcaster has over 500 employees on its rolls. Star’s Shankar said the company would like to keep the senior and middle management teams as they are.

Maa Television’s four channels—Maa TV (went on air in 2002), Maa Music (2008), Maa Movies (February 2011) and Maa Gold (February 2012)—currently have a 27% share of the Telugu general entertainment channel market.

The deal will see the entry of Star into the crowded Andhra Pradesh and Telangana markets, where national players such as Zee Entertainment Enterprises Ltd, Sun TV Network Ltd and Reliance Industries Ltd (through Network18 Media and Investments Ltd in the Eenadu Group) compete. A total of 14 general entertainment channels operate in the two Telugu-speaking states apart from 34 news channels, nine religious channels, three film-based channels, four music channels, and two health channels.

Star’s acquisition of Maa comes nearly three years after Sony Pictures Television Inc. signed a letter of intent to acquire 30% stake in Maa Television. The deal, however, didn’t fructify because of differences over valuation. Nagarjuna declined any comment on this.

Maa Television’s chairman Prasad is being investigated by the Central Bureau of Investigation for allegedly investing 854 crore in the companies of YSR Congress president Y.S. Jaganmohan Reddy in return for land allotments during the time Reddy’s father, Y.S. Rajasekhara Reddy, was the state’s chief minister. The senior Reddy died in a September 2009 helicopter crash. Prasad was arrested and is currently out on bail.

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