A 39% interest in Viacom 18 is being finalized by Uday Shankar and James Murdoch. Uday Shankar and James Murdoch’s investment firm Lupa India is in the final stages of acquiring Viacom 18.
In response to an industry consolidation sparked by the Zee-Sony merger, Reliance Industries and other investors, including James Murdoch and Uday Shankar, aim to spend over Rs 12,000 crore in entertainment and sports broadcasting market.
Murdoch, the son of media mogul Rupert Murdoch, and Shankar, the former chairman of Star & Disney India, aim to buy approximately 40% of Viacom18. The new Viacom18 will operate television and internet entertainment channels and is expanding into sports, according to sources.
Viacom18 Situation
According to one of the sources, ViacomCBS has a 49% investment in Viacom18. It is expected to sell a tiny portion of its stake and be diluted to roughly 10%. Reliance Industries-owned TV18 would retain a majority position.
The transaction would comprise a main and secondary injection of around 12,000 crores in Viacom18 from investors at a value of approximately $4 billion (30,000 crores). The majority of the investment will most likely be made in the form of a major injection of money. A few financial investors may acquire holdings in addition to the Murdoch-Shankar partnership, which is coming in as a strategy.
Shankar-Murdoch Partnership
According to sources, the Shankar-Murdoch investment arm has made it plain that it would only invest in the step-down subsidiary and has no interest in the group’s news operation. Shankar is also expected to play a crucial role in the JV’s sports business development.
Shankar has a 51% share in Lupa India, while James Murdoch‘s family office owns a 49% stake. They had previously teamed up to fund $345 million via Seven Island, a Special Purpose Acquisition Company (SPAC).
Lupa India and Reliance are likely to spend around Rs 12,000 crore in Viacom18’s sports and entertainment division. However, reports claim that the precise sum to be invested is still being worked out.
The Deal
A Singapore-based joint venture between Shankar and Rupert Murdoch’s private investment firm, Lupa Systems, is in advanced discussions with ViacomCBS. Reliance Industries’ step-down subsidiary TV18 has the remaining 51% ownership.
A source stated that Uday Shankar is leading the discussions and an agreement might be reached in the next two to three weeks. ViacomCBS’s stock will be diluted to roughly 10%.
Viacom18 will have a lot of artillery thanks to Shankar’s entrance and fresh cash for the key IPL (Indian Premier League) media rights auction.
The discussions are on track and Shankar and his team will have strong operational involvement in the firm as part of the agreement. This includes influence on the appointment of a CEO and senior management personnel.
Conclusion
Two major cricket broadcasting rights are up for grabs this year. Media corporations are expected to require more than Rs 40,000 crore to compete. These include the Indian Premier League’s (IPL) five-year broadcasting and digital rights and the International Cricket Council’s (ICC) eight-year deal for broadcasting and digital rights for different World Cup competitions.
Shankar was the former CEO of Star India as well as Disney. He was a driving force behind the broadcaster’s foray into sports. During his tenure, Star grabbed the IPL’s media and digital rights from Sony, paying twice as much as Sony had spent in the initial media rights auction. Star had also spent Rs. 11,880 crore to acquire an eight-year contract with the International Cricket Council (ICC).
