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Star, which holds 25.99 per cent stake in Balaji through Asian Broadcasting, is looking at selling its stake. Sources close to the developments said the exclusivity contract between the two firms may not be renewed.
While Balaji has the first right of refusal, sources close to the company said the its promoters were not inclined to buy Star's stake. Since this opens the door for Star to sell its stake to a third party, negotiations are on with investment bankers to find potential buyers. Jeetendra, Shobha Kapoor, Tushar Kapoor and Ramesh Gopaldas Sippy together hold 40.01 per cent stake in Balaji. Star had entered into an exclusivity deal with Balaji in 2004-05, under which the latter had to produce prime time shows for the channel. No other Hindi general entertainment channel was allowed to air Balaji shows in that time band. “Star has been paying a premium all these years for the exclusive time slots, but ratings for Balaji shows have slipped lately. Subsequently, Star has replaced Balaji shows with other productions, thereby reducing the channel's dependence on Balaji. Star's joint venture with Balaji to foray into the southern market has also not made any headway. It is believed that Star is in talks with Kerala-based television broadcaster Asianet to launch a bouquet of regional channels. However, sources said the agreement with Balaji will have to be terminated before the deal with Asianet can be signed. This is because under the terms, neither of the parties can form a joint venture with a third party. When contacted, R Karthik, CEO, Balaji Telefilms, declined to comment. Star India's spokesperson said, “As a matter of policy, we do not comment on speculations.” |
Source: Business Standard