'Nothing Is Permanent In Media'
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The news is that you are off media and entertainment. What do you plan now?
We started this new infrastructure business, Essel Infra, which is building up quite nicely. Then we took over the Shirpur gold factory (in Maharashtra).
How did you decide on these new areas? Were there any family links?
These are completely new (areas). The media businesses, Essel Packaging, EsselWorld, or even the multiplexes, are all service-oriented. They need daily management. You cannot sit idle; every day you have to worry about each of your shows. So I thought we should have some annuity business too, such as in manufacturing. Once you have a unit, and the market, it continues. So I chose infrastruc-ture. In a short time, we have built an order book of Rs 25,000 crore in road construction, municipal solid waste management and water supply. These are relatively quiet ventures, without too much controversy. Some years ago, we had bid for airport development too. But we did not get good partners.
The Essel Group had bid for some of the Mumbai mill land too.
Yes, we had bid for one of the mills. But that business is with my brother Laxmi Goel, that is, with Fun Republic and other realty businesses. Then we started with infrastructure, and today we are doing 10 road projects. We would be building up in this area.
When did you decide to go into gold refining?
There was a sick unit in Shirpur, near Dhule. It belonged to Mukesh Patel of Autoriders. He was a friend of mine. We acquired it through banks. Work has started. We will be acquiring the raw material from the gold mines, and refining it in Shirpur. India imports 800 tonnes (of gold) per annum. So we will be supplying to the domestic market. The refining sector is a competitive business, but this is the only refining unit in the country.
What are you concentrating on after the family division, and with Punit (elder son) taking over the media companies? After all, you cannot ignore that old tick.
(Laughs) My focus is mainly on the Veria Lifestyle channel in the US — on a healthy and peaceful lifestyle. The content is produced in US studios. We also have a Vipassana centre in Esselworld Park.
I am sitting pretty. Earlier, I used to be hands-on. I have a CEO looking after infrastructure. Amit (younger son) is looking after the gold business. When they need my intervention, they come to me.
What has changed? Are you completely out of the media business?
There is no need since others are looking after (the businesses). But I do review the businesses once a month and I give my inputs. I am still chairman of all the companies. But now they are independent. I ask them to take their own decisions. Laxmi and Jawahar (Chandra's brothers) always handled things independently. Now, their families will grow more.
The main media businesses — Zee Entertainment Enterprises (Zeel) and Zee News — are with your family, with Punit. What are the challenges in this sector?
The industry is still structurally weak. Today, advertisers are paying for just 50-60 million homes when we are delivering to 120 million homes. Programming cost has become unrealistically high. Films are selling for Rs 35 crore each. Films make more money from television than from box office collections.
Zeel has built up 26 channels. It also gives good profits by keeping costs under control compared to other media companies. Yet the channels have slipped from leadership positions. Why?
There is nothing permanent in this business. Earlier, too, we have slipped and come back. Most of our channels are at No. 1 or No. 2 position except Zee TV, which is now at No. 4. But this will change in about three months, and we will become No. 2 or even No. 1. My suggestion is to never give up, and to listen to the viewer. Never say you know everything; the viewer knows everything. On the other hand, I am keeping my patience, and I am not nudging them every day and saying ‘what has happened?'
In sports, many things like the Indian Cricket League (ICL), did not work. What went wrong?
Sports still excites me. ICL was working out. It would have been a success despite BCCI (Board of Control for Cricket in India) if the 2008 slowdown had not happened. None of the sports platforms are making money today. If you are profitable, you are successful. ESPN is not making a profit despite being in the business for a longer time. We made a small loss last year, but this year, we will break even or make some profit. Next year, we will be profitable. In sports, we have three channels and will launch two more. I have not given up.
Unfortunately, you could not get key cricket broadcast rights, like for the ICC World Cup 2002 and the BCCI rights in 2004, despite being the highest bidder.
I do not do chamcha-giri or ji-hazoori. I am not good at playing politics. That I lost may have been a blessing in disguise because these sports properties were so over-priced, we may have lost money. Harish Thawani (promoter of Neo Sports, which won the BCCI rights) has lost money. He barely owns 5-7 per cent of his company today.
You have been directly responsible for DNA (daily newspaper) for some years. It has slipped to No. 3 in Mumbai.
In DNA, too, I am no more hands-on, though I often have discussions with the editor, Aditya Sinha. We will make up. The problem is we must have that big story every day or every second day. We are concentrating on improving editorial.
(This story was published in Businessworld Issue Dated 19-09-2011)