Download the latest issue of Business Today Magazine just for Rs.49
Cash out, tune in

Cash out, tune in

Sun TV Network steps into Red FM.

It's changed hands once again. And how! In January 2006, NDTV, Astro of Malaysia along with Usha Reddy and Arjun Rao of Hyderabad-based it firm Value Labs had bought out Red fm from the Living Media group (of which BT is a part) for some Rs 130 crore. Last fortnight, it was the turn of Astro to exit the venture. The latest entrant? Sun TV Network, which has bought into Red fm via a subsidiary company, South Asia fm Ltd (SAFL). SAFL has picked up 48.9 per cent in the fm channel's holding company. That's just one part of the deal. Perhaps the more interesting part is that NDTV, after selling their stake to the Sun subsidiary, have bought a stake in the subsidiary itself. Reddy and Rao, for their part, continue to be the largest shareholder in Red fm with 51.1 per cent, even as they along with NDTV have subscribed to the enlarged equity base of SAFL. The upshot? NDTV and Rao now have some 35 per cent in SAFL, which makes Prannoy Roy's company an indirect shareholder in Red fm. But the deal makes sense for NDTV as it now gets access to 23 radio stations of SAFL (Sun has another radio company, Kal Radio, for the southern language states). Says Narayan Rao, CEO, NDTV Ltd: "The fm radio sector in India is poised for rapid growth and this strategic alliance is now better equipped to reap the benefits that this sector offers."

Sun TV Network in turn gets three radio stations of Red FM in Delhi, Mumbai and Kolkata. It could also derive synergies with NDTV in the north, an area in which it obviously isn't as strong as in the south. And where does this leave Rao? "Red FM and SAFL will be able to offer a more effective solution for the advertising community's needs in terms of wider reach and effective communication," says Arjun Rao. It's a motley crowd, but as far as deals go, this appears win-win-win, alright, the long gestation nature of the radio business notwithstanding.

Published on: Sep 11, 2007, 5:18 AM IST
Posted by: AtMigration, Sep 11, 2007, 5:18 AM IST