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Sony looking at M&A to grow India TV broadcast biz

MUMBAI: Mergers and acquisitions (M&A) are a crucial component in Sony Pictures Networks India’s growth strategy, Sony Corporation CFO Kenichiro Yoshida told analysts after the Q3 results announcement.

Kenichiro Yoshida“In order to expand our business outside of the US, primarily in India, we are taking various measures to grow including M&A,” Yoshida said while talking about the media networks business.

India is the biggest market for Sony Pictures Television, which houses the media networks business of the corporation. Media Networks includes the operation of television and digital networks worldwide.

In February 2015, Sony Corp CEO Kazuo Hirai had outlined the importance of M&A by stating that the conglomerate was game for acquiring entertainment assets in India.

The importance of M&A for SPNI can be gauged from the fact that it had concluded its biggest acquisition deal last year by acquiring ZEEL’s sports business under Taj Television for $385 million. The deal gives Sony a bigger play in India’s dynamic sports business.

Earlier, it was exploring acquisitions of ETV’s regional entertainment channels and Telugu broadcaster Maa Television Network. However, both acquisition bids fell through. Eventually, the whole of ETV including news channels excluding Telugu channels was acquired by the Network18 Group for Rs 2,053 crore while Maa Television Network was snapped up by Star India for $346 million.

SPNI was also in talks to acquire 9X Media. However, it did not reach the conclusive stage.

Yoshida said that media networks business is a typical recurring-revenue business. Similarly, motion pictures and TV production can also be recurring-revenue businesses if they consistently produce premium content by leveraging, creating and accumulating IP.

“Since focusing on recurring-revenue businesses and aiming to grow profit in a stable manner fits with the mid-range strategy of the Sony Group, the pictures segment is an important business of Sony,” he stated.

Earlier, Sony Corp had announced a $962 million impairment charge for its Pictures division. “The majority of the goodwill that was impaired was originally recorded at the time of the acquisition of Columbia Pictures Entertainment Inc. in 1989,” the company said.

SPNI’s bouquet of channels include Sony Entertainment Television (SET), SAB TV, Sony Pal, Sony Max, Sony Max 2, Sony Wah, Sony Mix, Aath, Sony Pix, AXN, Sony Six, Sony ESPN, Sony Le PLEX HD, Sony Rox HD and Animax India.