TV Today Group announced on Friday that it is looking to sell off its radio division Oye FM, which operates 7 stations has been suffering losses recently. Interestingly for the TV Today group, this will not be the first time that it will engage in selling a radio property. Back in 2006 when the industry was on the verge of moving from Phase I to Phase II expansion, it sold of its stake in RED FM to a consortium, which included Value Lab and NDTV. Sun TV later picked up majority stake in RED FM.
According to Q3’15 filing by TV Today, it suffered a loss of Rs 1.94 crore. It also suffered losses of Rs 2.90 crore in Q3’14 and Rs 1.80 crore in Q2’15. The nine-month period results for 2015 showed a loss of Rs 6.30 crore compared with Rs 7.24-crore loss for the corresponding period last year. (All figures have been rounded off).
Rumors suggest that Oye FM could be valued as low as Rs 50 crore as the buyer will also have to shell out money for the migration fee (Migration fee for Delhi is around Rs 37 crore).
With Phase III auctions around the corner, the timing of this announcement might not be surprising as it will allow TV Today to let go of a non-performing unit. With frequencies scarcer this time in the lucrative hubs of Delhi and Mumbai, it might fancy itself to be in a better position to command a reasonable price for the sale. In fact, the lack of frequencies in markets like Delhi and Mumbai has been one of the major issues facing operators as they prepare for Phase III.
When we spoke to radio operators earlier, many pointed out the relative advantages of buying out an established channel rather than new frequencies and then investing in setting up a network from scratch.
To Bid or Buy? It is decision time for FM Operators
Ever since the ministry has fast tracked the Phase III auctions, we have seen quite a bit of movement in the radio space. Dainik Jagran announced its entry by picking up Radio City. A couple of other regional stations are also rumoured to be on the block, with more clarity expected in the coming days.