Network18 founder Raghav Bahl plans to launch digital news outlet9 min read . Updated: 16 Jul 2014, 08:16 AM IST
In an interview, Bahl speaks about journalism, his and Network18's past, and the digital future he sees for media
New Delhi: Raghav Bahl, 51, the founder of Network18 Media and Investments Ltd, who exited after Reliance Industries Ltd (RIL) decided in May to convert its debentures in the group into shares and take control, says he loves news too much, and will launch a digital news outlet that would complement his former company’s offerings.
“I believe journalism or news will migrate to the online medium," says Bahl, adding that he was still young (“50s are the new 30s"), and has “experience and capital".
Bahl walked out of TV18 on 29 May with around ₹ 700 crore. He subsequently returned as a non-executive independent director on the board of the company.
Bahl insists there was nothing sudden or surprising about Network18’s takeover by RIL and that it had nothing to do with the formation of a Bharatiya Janata Party-led National Democratic Alliance government at the centre in May, seeking to dispel one popular rumour about the development. He also dismisses subsequent reports about the happenings at TV18 as “surround sound".
The “transaction started weeks earlier," he says. And back in January 2012, when RIL invested in the group by purchasing debentures, “we disclosed that they had a right to convert at any moment".
And he had made it clear to RIL that he would exit once the debentures were converted because he didn’t want to “work as a minority voting shareholder". In an interview, he spoke about journalism, his and Network18’s past, and the digital future he sees for media (and also for himself). Edited excerpts:
We believe you are venturing into digital media. Could you share your plans?
It’s too early to be concrete about it. But I see myself at an interesting juncture. We finished one innings very satisfactorily and built one of the finest and largest media companies in India. I let that be and move on to the second thing. I am not very old...50s are the new 30s. Also, the handicaps—no capital or experience—I had when I started Network18 are not there. So if I am young, have experience and the capital, I’ll do something. I am too much of a news lover and the obvious thing to do is in the digital space because I believe journalism or news will migrate to the online medium.
We will do news in English and Hindi to begin with. Regional will come later.
Will you compete with RIL in this space?
I think we will be complementary because 4G will be the platform on which a lot of our products will be carried. So we will be complementary and not competitive. We may compete with some other brands of Network18, but that is inevitable if you’re going to be in the content space. This is just the beginning of the Internet. There is space for hundreds of us.
Will this news be screen-agnostic and available on mobile phones, tablets and computers?
It is my conviction that in the next decade, news would move entirely to the hand-held devices because it’s not a community consumption exercise. It is personal. We read our news one-on-one. And the ease with which it is getting disseminated on hand-held devices, it does not require a very innovative mind to say that this will go hand-held.
You are known for working with foreign media brands such as CNN and CNBC. Will you do similar tie-ups in the digital space?
We are very open people. I had a great run working with the Americans. We had five very successful joint ventures in India (with) CNN, CNBC, Viacom, Forbes India and A+N Networks. I have great admiration for the way the Americans do business. They drive a hard bargain, but once they do it, they stick to their contracts. So we would love to do more business with American companies. They bring the best practices. But this time, as we said, we are not starved for capital, so we will write much better terms for ourselves.
The return on investment in digital still remains very small.
I think you are reaching an inflection point and you will see audiences moving very strongly in favour of multimedia and hand-held content. Once they do that, advertisers and revenue will follow. We are beginning to see that. I agree revenues haven’t moved as much, but that doesn’t mean that they won’t.
Was the takeover fractious or amicable?
There has been a lot written on this. I did not speak because the transaction was still being done. Last Monday (7 July) is when the transaction got completed. A lot of commentary has happened on it. Some said it was acrimonious, others wrote it was sudden and not a nice way to go. I think it’s important for me to say a few things very clearly. It is a very under-appreciated fact that our declaration of January 2012 was the most transparent declaration of how a joint venture financing was structured. We declared everything. The funding was coming into my holding company. We declared that the ultimate beneficiary of that funding was Reliance Industries. We declared that Reliance Industries was not going to exercise any control on the group either by way of being on the board or having access to any information rights. They were a pure financial investor in my holding company.
However, it was equally disclosed that they had a right to convert (debentures into shares) at any moment. As an entrepreneur, I was very clear, and I must give full credit to Mr (Mukesh) Ambani that he was equally clear... I said as long as I continue to exercise full control, full voting control, 73% of promoter’s equity, I will be there. The day you (Reliance Industries) decide, for your own plans and objectives, in this 10-year period, that you wish to convert and become the majority voting shareholder, I will be available as a friend, philosopher, guide, but I will not work as a minority voting shareholder. I will exit.
There was no question of acrimony. Mr Ambani never interfered at all in the two-and-a-half years. He stuck to the agreement he made to me in letter and in spirit. The instrument was clearly disclosed to the world and that the 10-year instrument was convertible at a moment’s notice.
But that moment is questionable.
It is part of their business plan at this point to become owners. I gave them the right in 2012 with my wits about me. It would be immoral, unethical and illegal on my part to go back on a contract.
But why did Reliance move in immediately after the formation of the new BJP government?
It’s got nothing to do with it. There are lots of nonsense coincidences that happen in life. The process of this transaction had started a few weeks earlier. No one knew what government is going to be in Delhi or what would happen. This is a commercial transaction and (has) got nothing to do with any change in government. The linearity will tell you the process started much earlier.
Some said it all happened in three days. A takeover filing with Sebi (Securities and Exchange Board of India), the draft offer statement—it’s such a complex document and can’t be put together in three days.
There were a few weeks before that when conversations were coming around to Mr Ambani saying that it was now for reasons of his own corporate plan he needed to convert.
But didn’t you try to source funds from elsewhere to stonewall it?
No. No question. I gave that right.
What were the compulsions when you signed the deal originally?
One shouldn’t mince words here. We had our back to the wall. We were in a classical debt trap. Our market cap had come down to ₹ 400 crore, our debt was over ₹ 2,000 crore plus. So a debt to market cap ratio of five. We would not have survived.
How do you think your employees view you and how will you be remembered in the history of broadcasting in India after this deal?
I believe they will be fair. Everyone will be fair. Time is a great healer. Time brings a correct perspective to issues. When you are too close to the events, you end being run over by emotions or take a slightly myopic view of things. As far as employees are concerned, would they be disappointed? Yes, they would be. Is there cause for alarm? I believe not. I believe that this company will be run on principles of sound, credible journalism. A fine, independent board has been created. Mr Deepak Parekh and Mr Adil Zainubhai are pedigreed individuals who will ensure that standards are kept up.
Emotionally, of course, people have a right to feel bad. The fact is that if this hadn’t been done, then a lot of them would have been facing a more dire crisis than what they believe they are facing now. There is no crisis now.
A lot of red flags have been raised internally and externally on vested interests in the new order. Won’t the equity of the news brands you created be eroded?
Such little time has passed. It’s just been a week—last Monday to this Monday (14 July). And we are already using a word like erosion. I for one have no doubt that no erosion will take place. They are all marquee brands. They have been nourished by very high quality journalism. Time will be a much better judge, but I have no doubt...
But the news of directives on coverage is coming out of the newsrooms at the channels.
Some of it comes from apprehension, some of it is giving in to the surround sound.
The track record will speak for itself. How can we jump to conclusions in a week? So people who have a reason to be feeling bad about this, they will certainly let some of that sentiment through. But that does not stand to any reason or evidence. These are perceptions.
But doesn’t news in India promote the vested interests of corporate houses and political parties? Isn’t its future grim?
News media promoting vested interests of corporate and political parties? I just don’t get it. First, they (media) are so plural. Mint, Outlook, Business Standard are all owned by different industrial groups. Network18 is now owned by another industrial group. And this is only at the national level and English-speaking. Go down to the regional paper. With so much plurality, even if vested interests were trying to let the media play to their tunes, the sheer plurality will cancel it out.
Having said that, I also don’t believe that Indian journalists are such commodities who are up for sale. They won’t play along something that is so blatant.
Do you feel that the quality of journalism has deteriorated?
Journalism in India is of a very high quality. I don’t think that is an issue. I have never been one of those prophets of doom who say it’s all coming down. I do believe that our media is completely free. What I sometimes find in the overburdened news environment where things are flashing, and everything is online...either on television or on digital...is the lack of rigour. I really do believe that the ability to get into the second layer perspective, understanding issues or data...is missing. That is not so much a comment on the quality of journalism but it has more to do professionals. So those who are young don’t really have the rigour because they would want to get the news out quickly and the ones who are old—and I say this with all circumspection—mix their opinions into facts. Other than that I do not see India’s news media flippant or sold out. We do seminal work. I see a lot of fair play. And independence.
There are dozens of newspapers and channels. So anyone who says that India’s news media can all be stacked in one direction has got it all wrong.