Star seeks Indian venture partner
Pressure is on for the satellite broadcaster to find a buyer for a 51pc stake in its Hindi-language news content provider
James Murdoch, chairman and chief executive of Hong Kong-based Star Group, will reportedly fly to Mumbai tomorrow to seek an Indian business partner for a majority stake in its Hindi news channel.
Mr Murdoch is to spend three days in India's financial capital to meet businessmen interested in buying a 51 per cent stake in Media Content and Communication Services (MCCS), which provides the content to the country's 24-hour Star News channel.
According to leading financial daily Business Standard, the front-runner is Calcutta-based media house Anand Bazar Patrika, which publishes newspapers and magazines in English and Bengali.
The Indian government last month ordered MCCS to find a dominant Indian shareholder with proven financial strength to have complete management and editorial control over Star News.
India's Information and Broadcasting Ministry has made recasting of MCCS' corporate structure a precondition for granting a long-term permit for satellite uplink.
The satellite-television company is now making do with temporary clearances, which are extended periodically to give Star News time to comply with the imposed regulation.
Star offloaded a 74 per cent stake in MCCS but local rivals alleged it continued to have editorial control.
Under the law, editorial control of news channels uplinking from India must be in Indian hands.
Acting on complaints, the government tightened its rules to ensure Indian control over content and ordered Star to find an Indian partner with a 51 per cent equity stake by September 22.
The current Indian shareholders of MCCS are advertising executive Suhel Seth, who owns 30 per cent of the shares, Merrill Lynch vice-chairman Hemendra Kothari (25 per cent), journalist Vir Sanghvi (5 per cent), lawyer Raian Karanjiwala (4 per cent), television personality Maya Alagh (5 per cent) and actor Jeetendra Kapoor (5 per cent).
Star, which entered the Hindi-language satellite news market in April, is the second-most watched provider, with a 21 per cent viewership share, behind India Today Group's Aaj Tak, which has an audience share of 43 per cent.
In addition to the news channel, Star India broadcasts 58 of the country's 100 most popular programmes.
Analysts said Star Group, which generates 2.1 per cent of News Corp's revenues and just produced its first annual operating profit, could produce 10 per cent of News Corp's sales within a decade if Star took advantage of growth potential in India and China. Star India generates about 12 billion rupees (HK$2.04 billion) a year, or 70 per cent of Star Group's revenues.
India has about 80 million television-owning households, of which half have access to cable and satellite connections.
Star India launched its Hindi news channel in April. It holds a 21pc viewership share
The broadcaster sold 74pc of the channel's content provider to six Indian individuals to meet ownership regulations
The government later ruled Star must instead find one Indian majority owner by September 22