Big ED In The Chair
One of the most sinister exchanges in the Niira Radia tapes takes place past 11 pm on June 10, 2009. The then PR diva is having a tense conversation with Manoj Modi, the right-hand man of India’s most powerful businessman, Mukesh Ambani. The top management of conglomerate Reliance Industries—a client of Radia’s PR firm—is upset, very upset. Business magazine Forbes India (published by the then Raghav Bahl-promoted Network 18) had committed, according to the Ambanis, a grave transgression. An irreverent column on the rich and famous, which went by the moniker Insnider, had taken a light-hearted swipe at the children of the RIL chairman.
Radia is trying to secure an apology from the Forbes editors. But Manoj Modi is in no mood for a mere apology. He threatens to press criminal charges on the then editor of the magazine, Indrajit Gupta, if he doesn’t reveal the source of the snippet. And then, Modi lets loose. “Yeh kya chhodne wala hoon kya main…it is concerning Mukesh personally and when Mukesh ko personally attack karega toh main Manoj Modi hoon, chhodunga nahi kisi ko.” Roughly translated, the chilling threat says: ‘I’m not going to leave, or forgive, the people responsible for this personal attack on Mukesh Ambani.’
Eventually, after a series of deliberations over e-mail, an “acceptable solution” was hammered out. After a legal notice, the snippet was withdrawn. An apology was published, not in the editor’s note as demanded, but on the letters to the editor pages, as is the norm. Listening to Manoj Modi again offers a fascinating glimpse into how a corporate behemoth’s association with the media house began in 2009. It’s a story of how creeping control over the Network 18 group has led to a situation where India’s biggest business house Reliance today directly owns one of the country’s most powerful TV broadcasting platforms. And yes, Manoj Modi is running the show at Network 18 now.
‘Chhodunga Nahin’ The RIL boss’s right-hand man, Manoj Modi. (Photograph by Getty Images, From Outlook 14 July 2014)
Back in 2009, in a strange coincidence, Sharanya, a company in which RIL had a stake, made a Rs 200 crore advance to Network 18. The years after 2008 were rough on most media companies after the financial downturn and Bahl had turned to RIL for help. It was well-known in Mumbai’s stockmarket circles that Network 18’s finances were not in the pink of health. Sources in Network 18 confirmed this initial investment, but denied any “pressure” from RIL. (As for Reliance, a mail with queries sent 15 days ago by Outlook to its corporate communications department was still unanswered at the time of going to press.)
The exertions came later, slowly and steadily. A cover story in Forbes was dropped at the last minute in 2011, taking even the business magazine’s senior editors by surprise. As Caravan magazine wrote in its2013 cover story on how “Reliance and right-wing politics gained a foothold in Raghav Bahl’s media empire”, a February 2011 story on SEBI chairman C.B. Bhave was dropped at the last minute. Reason: SEBI was investigating reports of insider-trading charges against the Ambani brothers’ companies. Caravan wrote, “Later, in a review meeting with the staff, Bahl took responsibility for the inadequate replacement cover, but did not explain why the Bhave story wasn’t carried. Bahl did not disclose that Network 18 and Reliance—which had been mentioned in the story for its troubles with SEBI—were very likely in talks that February about a Network 18 bailout.”
And, not surprisingly, soon after in January 2012, RIL announced an investment of Rs 1,700 crore through Independent Media Trust, its subsidiary. Over two years later, on May 30, 2014, RIL took over Network 18 lock, stock and barrel. If this runs counter to a stated position by Mukesh Ambani in 1999—that Reliance will never get into the media business—it’s purely a convergence of political and corporate interests that have caused this change in stance. It’s a change that has massive implications for public discourse and the media industry.
Mukesh Ambani and Raghav Bahl at a CNBC-TV18 interview
That’s because the way this entire twin-pronged takeover by India’s largest business house has been structured raises issues for news management in the country. This is particularly true given RIL’s well-known aggressive stance against media houses and publications that run counter to its business interests. But strangely, there appears to be very little debate about the implications—on public policy, lobbying, regulations—of such a takeover. Apart from a few exceptions:
- Pankaj Mishra wrote in Bloomberg View: “There is no denying that the future of media freedom in India looks even bleaker than ever after Ambani’s Silvio Berlusconi-style domination of both news and entertainment content and delivery mechanisms.”
- Veteran journalist Kuldip Nayar wrote in Deccan Herald: “I was not surprised when TV channels did not cover the taking over of a large TV news network by Mukesh Ambani’s Reliance Industries.”
- Veteran editor S. Nihal Singh told Outlook: “Corporate investment is inevitable in news media but there should be rules stating corporates shouldn’t overwhelmingly own content.”
Of course, corporate ownership of media is nothing new. Most media houses are business houses today. Two years ago, a flurry of acquisitions in NDTV, TV Today and Network 18-Eenadu by Abhay Oswal, Aditya Kumaramangalam Birla and Mukesh Ambani signalled the increasing interest of corporates in news media outlets in the north. The Marans and Ramoji Rao hold sway in the south. Politicians got into the ownership game and concerns were raised about news tailor- made for corporate interests, and the convergence of political and business interests via media. (For the record, Outlook comes from the house of Rahejas.)
There’s no denying that with RIL’s absolute takeover, the corporate stakes in Indian media are on another plane. When India’s richest man heading the largest business house, whose business interests embrace the entire spectrum, from gas, yarn, retail to telecom and a cricket team, with annual revenues worth Rs 4,01,302 crore (approximately $67 billion) and a net profit of Rs 21,984 crore (a little under $4 billion) takes over Network 18, worth Rs 2,692 crore, it looks like loose change for a massive corporate. But by getting control over one of the largest diversified media houses of the country, it raises the spectre of business interests altering the news landscape in the future.
The media house now has powerful business news and general news channels, websites, magazines and entertainment that figure in Top 10 viewership pickings. It has important digital properties like HomeShop 18 and bookmyshow.com. Add the Eenadu network with 12 TV channels in even states like Jharkhand and Chhattisgarh, and RIL will straddle a huge swathe of the countryside. All this “content” is needed, according to RIL, to feed Reliance Jio. According to media reports, Reliance Jio is poised to offer 4G high-speed data and voice services in every part of the country. So, thanks to acquiring this premium media house, RIL becomes an important gatekeeper and producer of content. And it also owns the pipeline.
The interesting thing is, facts run contrary to the perception that Raghav Bahl (who didn’t speak to Outlook for this story) was forced into the deal with RIL. A person knowledgeable in such matters says Bahl knew exactly what he was getting into when he agreed on the terms and conditions of the lifeline offered by Reliance in 2012.
Kejriwal’s ‘edited’ Google hangout programme
The structuring of the deal has raised questions too. For it has not been a straightforward corporate buyout of a media house. Consider this: a trust by RIL advanced money to Network 18 to pick up stakes in another media house—Andhra Pradesh-based Ramoji Rao’s Eenadu network. RIL’s own stake in Eenadu was kept under wraps for a long time, and only came to light in the course of a litigation process. Reliance first admitted in the Andhra Pradesh High Court in 2011 about its investment in Ushodaya, etv’s parent company, three years after it ostensibly took place.
There were political reasons for this move. Andhra Pradesh was the state that witnessed a pitched battle over gas in the mid-2000s onwards, as Ambani faced a hostile Congress government in the state. UnderEenadu, with its anti-Congress stand, here was at least a media platform to counter the government (see box). Like his father, Mukesh Ambani picked up stakes in the media when he thought opinion was swinging away from him. Clearly, the political pressure Reliance has been facing on the gas front—fuelled by a vociferous attack by AAP, which made it it’s big election issue—was a factor driving the acquisition of Network 18, which will hold sway from the north to the south of the country.
There have been questions raised about its 4G play too. When RIL acquired Infotel Broadband promoted by the Nahatas of HFCL, almost immediately after the latter won a pan-India 4G/BWA spectrum in 2010, questions were raised about the way Mukesh Ambani had orchestrated a re-entry into one of his favourite sectors. The fact that Infotel submitted earnest money of over Rs 250 crore and put in a bid for spectrum worth over Rs 12,500 crore—several thousand times its own value—had not gone unnoticed. Now the CAG has questioned the way RIL made its entry into the telecom sector and has sought a cancellation of Reliance’s licence.
Along with these corporate questions about its media dealings, RIL’s take-no-prisoners approach to editorial matters is cause for concern. A year after RIL’s helpline to Network 18 in 2012, four top editors quit the business magazine Forbes India. This happened just about the time moves were being initiated ostensibly to create an integrated newsroom by bringing website Firstpost.com and Forbes India together. The four editors left as Network 18 had reneged on its promise of offering Employee Stock Options (ESOPs) to them. On its part, RIL signalled they were not behind the move to ease out the editors.
Then, more than 300 Network 18 employees lost their jobs in 2013. Sources now say this was part of a downsizing exercise that was to be executed in 2010-11. Based on the recommendations of Ernst & Young, the layoffs came at a time when the Indian media was crawling back from the financial meltdown of 2008. “It was decided to defer the exercise. This was not a sudden exercise. We couldn’t implement it in 2010 as the markets were down,” says a source with direct knowledge of the matter.
The exit of the editors, the sackings, appear like scenes from a script written by Bahl and RIL. Many financial analysts Outlook spoke to said the takeover was the only logical conclusion to the arrangement that Bahl had entered with RIL. “Bahl had given away the company wilfully. There was no murmur of dissent from him,” says a source. (At the time of the 2012 deal with Reliance, Bahl’s long-term partner and the CFO of the company Haresh Chawla had quit the group. Chawla too declined to speak to Outlook for this story).
Clearly, the earlier round of layoffs just set the stage for the final act in May 2014. In May this year, we saw the high-profile exits of Bahl, the CEO B. Sai Kumar, COO Ajay Chako, and the CFO R.D.S. Bawa. The faces of CNN-IBN, editor-in-chief Rajdeep Sardesai and his wife Sagarika Ghose, have quit. Marathi channel IBN-Lokmat editor Nikhil Wagle is in the process of putting in his papers. A few months before their exit, prominent anchor of shows like The Last Word and Devil’s Advocate, Karan Thapar, too had exited. A new management under RIL is in place, fronted by journalists Rohit Bansal, B.V. Rao, Umesh Upadhyay and Gautam Chikermane.
The editorial transition has not been smooth, and should serve as a warning for all media firms. In the early hours of February 10, 2014, with the country lurching into election mode, a set of e-mail exchanges found their way into the mailbox of some journalists. Bahl was upset with a tweet by Sagarika Ghose. She had tweeted:
There is an evil out there, an evil which is stamping out all free speech and silencing independent journalists: journalists unite!
— Sagarika Ghose (@sagarikaghose) February 7, 2014
This tweet led to an article in website scroll.in titled ‘Why CNN-IBN’s Sagarika Ghose will never criticise Modi again.’
After reading the article, noted historian Ramachandra Guha was moved enough to tweet:
A disturbing story of senior journalists being silenced or cautioned by proprietors currying favour with Mr Modi: http://t.co/ROZ3JiXNKi
— Ramachandra Guha (@Ram_Guha) February 9, 2014
Now this open discussion really upset Bahl. Around the same time, IBN-Lokmat editor Wagle tweeted, “Dangerous alliance of corrupt, communal politics n crony capitalists in this country want to muzzle d media. But we will fight back.”
Rajdeep Sardesai with staff in the CNN-IBN newsroom. (Photograph by Jitender Gupta)
Clearly, Bahl wanted an explanation. He wrote to Rajdeep Sardesai:
“Please see tweet below from Ram Guha. Coming from somebody as influential/credible as him (also one of your closest professional associates), this one is damaging. What’s more, Sagarika’s mail to me, yesterday, clearly saying that she has NEVER been muzzled over the last eight years in N18, completely and totally contradicts this. So in all fairness, I suggest we do one of the following things:
- Sagarika issues a CATEGORICAL denial of this tweet; or
- We could release the relevant text from Sagarika’s mail to me, so that this matter is put to rest.”
Though Bahl signed off on a cheery note, the mails revealed the simmering discontent. Bahl was in no mood to relent and started avoiding taking Sardesai’s calls. Some furious exchanges later, Rajdeep threatened to resign, saying:
“So now to ‘demand’ a public statement because Ram Guha has responded to a media website, is deeply unfair to me. I have, in a sense, carried the can for layoffs, for the Caravan piece that also attacked me, now am being asked to do so for an article I had nothing to do with. You have been a guide and a friend over a period of 8 very fulfilling years. I will leave with only warm thoughts….”
Finally, Bahl and Rajdeep agreed that Sagarika and other staffers would adhere to Network 18’s social media policy—any transgression would invite the “strictest possible action”. Later, this is what Sagarika put up on Facebook:
“So the ‘purge’ of the media gathers momentum, those not willing to express open admiration for the Supreme Leader now asked politely to resign or given the sack or marginalized. Soon Indian media will comprise of the single shrieking ‘nationalist’ right wing prosecutor and the rest of us will be history.”
In fact, even before the takeover by RIL on May 30, 2014, senior editors had started expressing concerns about the implications of the investment amid a rightward lurch being made by Network 18—that appeared to be the immediate provocation for Sagarika’s outburst (she was subsequently served a gag order by a mid-level Reliance officer). Sources say Manoj Modi would drop into the office “sounding like Abdul Kalam, asking journalists to highlight positive news”. (CNN-IBN happens to be one of the news channels that devoted substantial air-time to prime ministerial candidate Narendra Modi.)
Soon, Sardesai was under pressure again. With RIL facing the heat on gas pricing from the Aam Aadmi Party—which was alleging a nexus between the UPA and Ambani—pressure was mounting on Network 18 to drop the party from its platform. AAP’s government in Delhi went on the offensive, and mounted charges against Ambani, and filed an FIR against Mukesh Ambani, senior ministers of the UPA and bureaucrats on the gas pricing issue. Clearly, the largest company in the country was facing the heat with the fledgling party questioning its every deal.
Whenever AAP leaders Prashant Bhushan, Yogendra Yadav or Kejriwal appeared on the network, RIL frothed. Mint reported how a call was put by Manoj Modi to Bahl,
“Tum humko dacoit bulate ho, tum chilla rahe ho ki hum crony capitalist hain. Agar aisa tha to dacoit se paise mangne kyon aye the? Tum kaun se doodh ke dhule ho? (You are calling us a dacoit, you are shouting that we are crony capitalists. If that is so, then why did you come to us for money in the first place? Do you think you have such a clean record?)”
Pressure was mounting on Sardesai. There were two AAP leaders who were from the media group—Yogendra Yadav, a reputed psephologist on CNN-IBN, and Ashutosh, former managing editor of IBN-7. Manoj Modi had reasons to believe Sardesai had a soft corner for both. It is learnt that at a meeting in Mumbai in February, where Ambani, Manoj Modi and Sardesai were present, Manoj said, “AAP is being given too much importance. If possible, just boycott the buggers.” While this was being conveyed, Ambani smiled.
This was around the time Network 18 had reported the news of a car accident involving Ambani’s son, just like the other channels. The harsh language used during this encounter left no doubt in the minds of senior journalists about who was the “real boss” in Network 18.
Come April, with election season kicking in, Google Hangout—an initiative involving politicians in an informal chat with television anchors—began. On April 14, it featured politician Arvind Kejriwal in conversation with Sardesai. An hour before the show, it is learnt Sardesai received instructions to drop the chat. It was tense out there, say sources. Sardesai dug his heels in as the channel had a professional tie-up with Google and the meeting had already been arranged.
While Kejriwal was given the assurance that the chat would be carried live across Network 18, what was aired eventually was a delayed and an edited version on CNN-IBN. It is now learnt that RIL had sent a note, more in the nature of “cautioning” restraint, reminding the channel of a prior notice served on them and other channels. Says Kejriwal, “I had agreed to come on only after the assurance that the show will be beamed live and across the IBN network platform.”
If such was the power exerted before May 2014, without actual RIL control, this should raise concerns about the shape of the news post the takeover. It remains to be seen how controversial government decisions like FDI in multi- brand retail or gas pricing will be dealt with in the new dispensation. News, after all, is at the heart of democracy.
The news of the takeover has been greeted with a measured silence by the relevant authorities which some say is an indication of the clout that RIL wields. Stockmarket regulator SEBI, which “should have questioned” the private deal between RB Holdings and Independent Media Trust by seeking information on debentures and equity holdings, has kept its counsel. The Competition Commission of India fears no takeover of one company and has reposed full faith in the diverse nature of the media. The Editor’s Guild, which is a media watchdog too, sees no imminent threat from corporate takeover of the media. Says N. Ravi of the Guild, “The plurality of players prevent a monopoly situation from arising in India distorting free speech.”
The world over—the US and UK are two prime examples—media regulators have grappled with this problem. Worryingly, there has been limited success. A bigger concern is that India’s largest company does not take kindly to criticism. Whether it was the banishing of The Polyester Prince from Indian soil in the late 1980s, or the more recent instance of serving a defamation suit of Rs 100 crore on Paranjoy Guha Thakurta for writing The Gas Wars—a critical account of Ambani’s gas business—there has been little space for dissent in the Ambani world-view.
‘Reliance takes over Network 18: Is this the death of media independence?’, asks a headline in Forbes Asia—ironic considering the Indian edition of the magazine comes from Network 18. What goes around comes around, given that problems around Forbes India sparked off the events that led to this media takeover. Finally, it’s instructive to end with a quote from Indian Express head (New Media) Anant Goenka. “World over, news companies weren’t just valued by their business success, but for intangibles such as ability to influence public perception, discussion and political agenda, and the brand recall as well. And for good reason,” says Anant. It’s worth keeping these reasons in mind.
The Media Mogul
Enter Mukesh Dhirubhai Ambani
- “Big business” has always had a hand in Indian media but this is the first time a conglomerate of the size of Reliance (market cap: $50.93 bn) has stepped in.
- RIL has interests ranging from shoes to stores, IPL to SEZ. One RIL executive Parimal Nathwani is an MP. Ex-employee Rajeev Shukla was a UPA minister.
- The 2008 economy downturn leading to fall in revenues forced media promoters to offload their stakes. For RIL, buying TV18 for $730 million is small change.
- The TV18 acquisition comes at a time when the Narendra Modi government is seized of the K-G gas price hike issue. A UPA decision to hike prices from July 1 has been deferred for three months.
- RIL had funded TV18 to buy Hyderabad-based Eenadu TV into which had it ploughed in money to bail out YSR-baiter Ramoji Rao. YSR and RIL were daggers drawn on the K-G basin issue.
- RIL’s media foray has been greeted with silence by regulatory bodies like SEBI, even when now RIL can decide content on biz channels CNBC-TV18, CNBC Awaaz
- RIL’s interest in media has been less than glowing: it launched The Business & Political Observer newspaper at the cusp of liberalisation in 1991 only to shut it down
- The company’s commitment to free speech is shaky. Pursues sledgehammer approach to books questioning company’s practices. It’s taken out court injunctions and even sued authors.
- The Niira Radia tapes of 2009 show RIL’s efforts to shape, alter and distort the political and media discourse. Mukesh Ambani is quoted as saying: “Congress toh apna dukaan hai.”
- The exit of TV18 founder Raghav Bahl and nearly all his top executives less than a month after the swearing-in of the NDA government shows a heavy RIL hand in wanting to seize total control
The RIL-Network 18-Eenadu Multimedia Empire
13 news channels, 22 entertainment channels, 18 websites, in 11 languages
- CNBC-TV18, CNBC Awaaz, CNBC-Bajar (Gujarati biz channel)
- Flagship business channel CNBC-TV18 enjoys a 56 per cent viewership in the biz channel market
- CNN-IBN, IBN7 and IBN-Lokmat (a Marathi regional news channel in partnership with the Lokmat group), IBN-Gujarati.
- Flagship English news channel CNN-IBN has a relative market share of 27.5 per cent.
- Flagship Hindi news channel IBN7 has 14 per cent of the Hindi news market share
- Colors, Colors HD, MTV, Comedy Central, VH1, Nick, Sonic, Nick Jr./Teen Nick, History TV-18
- moneycontrol.com, Web 18, Newswire 18, HomeShop 18, Bookmyshow.com, IBNlive.com, Firstpost.com
- Network 18 clutch of websites are among the top eight web properties in India with 18.54 million monthly unique visitors
- HomeShop18.com is among the top 6 retail websites with 8.1 million monthly unique visitors
- Magazines: Forbes India, Overdrive, Better Photography
- Network of 12 channels, a daily, four magazines, Margadarsi Chits Ltd, Dolphin Group of Hotels, Ramoji Film City
- Eenadu is in the top six among language dailies of the country
- Has four Hindi channels in Madhya Pradesh, Uttar Pradesh, Bihar and Rajasthan
- Entertainment channels in Telugu, Kannada, Bangla, Oriya, Marathi, Urdu and Gujarati
- 24-hour news channels in Telugu and Kannada, Rajasthan, Chhattisgarh, Uttarakhand and Jharkhand
- Most channels occupy No. 3 and No. 4 positions in the viewership ratings in the languages
Foxes And Hares
- Three companies—News UK, Daily Mail General Trust and Trinity Mirror—control 70 per cent of national newspaper circulation. The BBC dominates, a single company, ITV, accounts for a majority of non-BBC TV news consumption.
- Ofcom regulations stipulate that sufficient plurality in the providers of different TV and radio services be maintained. Clearly, that is not the case.
- The top four corporate conglomerates control nearly 90 per cent of the media. These are Comcast, Walt Disney Company, 21st Century Fox/News Corporation and Time Warner Holdings.
- FCC regulations are there to prevent monopolies. But currently all there is is a raging debate on the subject.
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