Nothing is ever truly over: Punit Goenka on merger fallout with Sony

Even as the merger between Zee Entertainment Enterprises Ltd (ZEEL) and Sony Pictures Networks India (SPNI) collapsed last year, the former’s CEO Punit Goenka has left the door open for potential future collaborations.

In a recent interview with Zee Business, Goenka emphasized that “nothing is ever truly over,” suggesting that while the much-anticipated deal with Sony didn’t materialize, the possibility of renewed discussions cannot be ruled out.

The failed merger was one of the most significant developments in the Indian media landscape, with expectations of creating a broadcasting powerhouse. However, despite extensive negotiations and prolonged discussions, the deal did not come to fruition. 

While Goenka refrained from delving into specific reasons behind the fallout, his remarks indicate that Zee remains open to new opportunities—whether with Sony or another player.

“Today, even if our merger with Sony has failed, or it didn't happen because of whatever reason, a lot of things have happened, a lot of talks have taken place. So, I don't think there is much need to go into that. But I believe that even today, whether it's Sony or someone else, if they bring a proposal to me, which is in the interest of the shareholders, in the interest of the company, in the interest of my employees, then I will consider it 100%. I am absolutely open. There is no lock in my house,” said Goenka.

This stance leaves room for speculation on whether Sony and Zee could find common ground in the future or if another entity might step in with a fresh offer.

For now, while the merger stands scrapped, the business world knows that circumstances and interests evolve. Whether the embers of this failed deal reignite into something bigger remains to be seen.

Discussing the sharp decline in Zee’s stock post-merger fallout, Goenka expressed confidence in the company’s long-term value. He pointed out that TV penetration in India is still 70% and growing by 3-4% annually, ensuring strong demand for content across television and digital platforms. “TV and digital will both thrive. Our focus should be on delivering good content at the right price.”

During the interview, Goenka emphasized that his approach to work and leadership remains unchanged despite transitioning from MD to CEO. 

“See, nothing has changed. The way I work is the same as it was before. The entire team still reports to me,” he said.

The key difference, he noted, is that he is no longer a board member, which has actually been beneficial.

 “The only change is that I am no longer a board member. So, actually, it is better for me. Compliances are less for me. I have to sign fewer papers. But the business is the same as it was before. And, this no longer being a directorship, is actually better for me, because now I get time to focus on the business,” he said.

Highlighting Zee’s financial performance, he pointed out a significant profit increase over the past year. 

“So, if you look at the performance of Zee in the last year, if I talk about December 2023, we were at 10.2% profit. This December, we have given a profit of 16.1%. That means, a growth of 60% in profit in a year. How did this happen? This happened because the entire management is focused on how to give the company a better performance than the industry,” he said, adding that he is satisfied and happy with being just the CEO. 

Talking about how the company has changed in the last one year, and cost optimisation steps taken by the company, Goenka said costs increased significantly as the company was being shaped in alignment with the merger. 

“A year ago, we were shaping this company in alignment with the merger. Because of that, costs increased significantly. So, the first step we took was cost optimization. It took us 6-7 months to complete this process.

“By September-October, we had finalized the entire cost optimization. Now, our focus is on driving growth forward. We have three key pillars for this: Our three pillars are content, content monetization, and frugality—ensuring that we conduct business at the right cost. These are the principles we are working on,” he said. 

Talking about the merger of other big media houses and the growing competition, Goenka said competition has always been a part of the industry and that Zee has successfully competed both individually and against larger entities.

 He remains confident in Zee’s ability to navigate increasing competition by focusing on three key pillars: frugality, content, and monetization.

“If we achieve these three things, then what is competition? At the end, what is our competition? How did we bring the consumer to us? And I believe that competition is healthy. But bringing the consumer is the most important thing,” he said.

He emphasized that creating relevant and high-quality content will naturally attract consumers, enabling monetization. “If we make content relevant, if we make good content, then the consumer will come automatically. From there, we will be able to monetize it. And if we make it at the right price, then it is better for everyone,” he said.

Goenka also addressed key concerns regarding Zee Entertainment’s future, competition, governance, and digital expansion, reaffirming his commitment to the company and its shareholders.

Goenka acknowledged that Zee currently holds a 3.99% promoter stake and aims to increase it over time. However, he emphasized that the company’s vision and the promoters’ stake should be seen separately. “As promoters, we have to increase the stake. And as time goes by, we will keep informing shareholders about it.”

On corporate governance, he highlighted Zee’s strong compliance record. “We are an independent board-run company. No promoter is on the board—only independent directors. Since 2018-19, there has not been a single complaint from any Indian government department.” Regarding the SEBI probe, he stated, “SEBI was to give its report in April 2024, which has not come. We are waiting for it. But if you read the SAT order, every allegation has been addressed, and nothing has been found.”

On Zee’s OTT strategy, he explained that the platform caters to a different audience from TV. “We create separate content for OTT and TV. Over time, even audiences in smaller cities will recognize the value of premium content and be willing to pay for it,” he said.

Goenka concluded by emphasizing that Zee’s focus remains on content, monetization, and frugality, ensuring sustainable growth and strong shareholder value in the coming years.