HFCL-Nine Broadcasting India Ltd (HNBIL) today closed the chapter on what has been an acrimonious relationship and declared it would not bid for the prime time slot on national broadcaster Doordarshan‘s Metro channel "due to the unrealistic non-financial terms of the contractual arrangements proposed by DD."
The statement put the lid on speculation that Nine Broadcasting might make a fresh pitch for prime time slots on DD Metro after the failure of Prasar Bharati‘s efforts to attract bids. This is in spite of reports that the pubcaster would be calling for fresh bids without the requirement of a minimum floor price.

The company announced that the television business of HNBIL on Metro would cease to exist from 10 September 2001. After that date, HNBIL will downsize its operations and a core team will remain to explore further opportunities but the company itself is not shutting down, an official release said. However, all the staff related to the DD Metro business have been told to look for jobs elsewhere.

The statement said HNBIL was still interested in the partnership with DD Metro but only if DD was willing to deal with HNBIL on realistic terms.

The statement called the tender for DD Metro slots as unrealistic because:
1) New media and Internet rights to belong to DD.
2) The hold back clause for the re-runs of programmes for one year after the play out of the final episode could date programmes by more than two years before replay thereby reducing their value
3) The rigid FCT allocation, the fact that DD, without any financial consideration will use the programmes on DD World thus reducing the value of any international sale for the shows.
4) And most of all, the clause that DD reserves the right to terminate the contract without notice and without ascribing any reason to the company on-air makes it a pointless contract.

Listing the channel‘s successes in the nine months it had been on air, the statement said Nine Gold had:
* Increased the viewership base on DD Metro from 15.6 million to 25.6 million (7-10 pm).
* The time spent by viewers for the 7-10 pm block increased by 89%.
* Ratings have increased by 200% and revenue has increased significantly.
* Viewership in C&S homes has quadrupled.

And the options available to HFCL Nine Broadcasting CEO Ravina Raj Kohli ?
Film production for one (seems to be a popular theme with both broadcasters - Zee, Sony - and content providers - UTV, Balaji Telefilms) and then there is its subsidiary Nine Entertainment which could become a full fledged content provider.

One thing that HFCL Nine will have to write off with the closure of its Metro operations is what industry sources estimate to be Rs 1,500 million in accumulated losses built up over the last nine months.

The Ronnie Screwvalla-promoted UTV Software Communications Ltd‘s financials are out and it has made a net profit of Rs 160 million rupees on a total revenue of Rs 1,510 million for the year ending March, industry sources say.

Sources have been able to extrapolate the following information: For the year ending March 2001, the group‘s media revenues were Rs 1,510 million.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) were Rs 320 million, with a profit before tax (PBT) of Rs 200 million and a profit after tax (PAT) of Rs 160 million.

The revenue represents a 28 per cent jump over the last year, EBITDA a jump of 151 per cent and PAT an increase of 167 per cent.

From this year, they follow an accounting policy of 100 per cent write-off, which further made a deviation of profits of Rs 35 million. UTV follows a five-year write-off policy on all their plant, machinery and equipment. The group‘s accounts are audited by Arthur Andersen.

Their prospectus draft and research report show a paid up capital of Rs 120 million, therefore their earnings per share (EPS) in March 2001 would be Rs3.40.

The group‘s revenues and net profits come from multiple streams, broadly broken up as: - TV Content: 40 per cent - Ads / Dubbing / Inflight / Live Events: 15 per cent - Motion Pictures: 12 per cent - Post Production: 20 per cent - Animation: 10 per cent - Air time sales and distribution: 3 per cent.

The Group has over 400 clients. The top 10 clients represent only 21 per cent of the revenue stream. Therefore their client dependency on any one single client is not too high. Of the 400 clients, 45 are international and global clients and export and international business represents 18 to 20 per cent of their annualised figures.

UTV Software Communications is made up of United Television (UTV) and four subsidiaries - Vijay TV, UTV Singapore, UTV Malaysia and UTV Interactive.