Sony Pictures Television (SPT) will acquire 30 per cent stake in MAA Television Network, which has a bouquet of four Telugu channels.
On Monday, the two sides signed a Letter of Interest for stake sale, but said they are yet to decide on the value of the deal.
While the deal would give Sony a foothold in the southern TV market, for MAA it would help beef up its content line-up. According to sources, MAA TV plans to invest in acquiring more content for its channels.
“The alliance will provide strategic opportunities for both companies, as well as great viewing for television audiences in India,” said Mr Manjit Singh CEO MSM (SPT's India Operations). He however, refused to give details about the financial transactions.
Sources said the valuation of the company is still in process and may take a couple of months.
Mr Nimmagadda Prasad (a serial entrepreneur who sold Matrix Labs to Mylan), film actors Mr K Chiranjeevi, Mr Akkineni Nagarjuna and film producer Mr Allu Arvind are the four major promoters of MAA Television Network. They control the network with over 95 per cent of equity capital. They would hold about 70 per cent post stake sale.
The 10-year-old Telugu TV network has four channels — a general entertainment channel, music, movie and a youth channel. It had shut down a news channel a few years ago to focus on only entertainment. MAA has satellite telecast rights for about 700 films, majority of them Tollywood blockbusters.
According to TAM data, the company's flagship general entertainment channel (GEC) - MAA TV - commands 10 per cent share of the overall Telugu channels market.
Regional TV looking up
The deal also assumes significance considering the growing clout of regional channels. According to a recently released FICCI-KPMG report, regional channels account for approximately 33 per cent of the all-India television viewership.
Mr Timmy Kandhari, leader, entertainment & media practice at PwC India said, “The viewership for local language programme is growing which has led to a faster growth in regional advertising revenues.”
(with inputs from New Delhi and Chennai bureaus)