Brash, bigoted, fake news peddler, news messiah of right-wingers...Arnab Goswami has been called by many names by those who track him. It is often a love-him-hate-him-but still watch-him relationship for his detractors. For his ardent desh-bhakt type followers, Arnab, with his high-decibel anchoring, is the deserved sultan of real TV news irrespective of the charges that he seems partisan, jingoistic to the point of no return.
Arnab has set the TV news agenda for many years. First it was at Times Now and now at Republic TV. This blog post is not about the spectacled blabbermouth character he successfully plays on national TV, or the sun-glass wearing personality that even funny-bone Kunal Kamra couldn't get to react much during that famous on-air interview.
This blog post is about how Arnab has so far managed the financial agenda. To find out, I went to the all-powerful MCA (Ministry Of Corporate Affairs) website and accessed financial details of his company.
It is only fair that once in a while media - which wants 100% transparency from all -- be put under the same microscope especially, for the finances.
Arnab Goswami is a director in 3 entities: SARG Media Holding private Limited, ARG Outlier Media Asianet News Private Limited, and SARG Global Digital Private Limited. This blog post is mostly about ARG Outlier Media company. ARG stands for Arnab Ranjan Goswami.
ARG Outlier Media Private Limited is the old name of the company. In fact, Arnab and his spouse, Samyabrata Ray Goswami, became directors in ARG soon after Arnab quit Times Now in 2016. Later, ARG got investment from entities associated with Rajeev Chandrasekhar (a BJP Rajya Sabha MP who controls Asianet). So subsequently, ARG Outlier Media became ARG Outlier Media Asianet News Private Limited. In 2018, Rajeev stepped down from the Republic TV board. In April 2020, another name change happened and now it is back to ARG Outlier Media (back to square one!).
Who are the shareholders?
As on March 31, 2019, the list of shareholders of ARG Outlier Media had Arnab Goswami (0.03%), SARG Media Holding Private Limited (67.12% through equity and 13.65% through Series B - CCPPS), Asianet News Media & Entertainment Private Limited (16.35% through Series A - CCPPS and 0.03% through Series A equity shares), and 4 Kolkata-based entities: RPG Power Trading Company Limited (1.02% through Series C - CCPPS), Anant Udyog LLP (0.77% through Series C - CCPPS), Purvanchal Leasing Limited (0.51% through Series C - CCPPS) and Dynamic Storage and Retrieval Systems Private Limited (0.51% through Series C - CCPPS).
The last 4 entities subscribed to over 8,300 Series C - CCPPS in FY19. CCPPS is Compulsorily Convertible Participative Preference Shares.
The above broad shareholding has undergone a change in some respects.
In a statement in February 2020, Republic Media Network had said Goswami holds over 82% of ARG Outlier Media Private Limited, the company that owns and operates Republic TV. His company also owns 99% equity in the downstream digital entity (SARG Global Digital) that controls the digital assets of the network.
Turns out that on the second anniversary of the channel, Goswami in May 2019 bought a chunk of shares held by Rajeev Chandrasekhar-promoted Asianet News Media & Entertainment to gain ownership. Asianet News had at the time of selling shares to Goswami signalled that Republic TV''s valuation was about Rs 1,200 crore.
We will update you when we get the March 31, 2020 shareholding data on ARG Outlier Media.
Who provides financing help to ARG Outlier Media?
Regulatory filings usually give a dated but accurate idea of bankers/financiers. MCA filings show charges created or modified for each company. I came across filings that suggested Rs 10 crore charge creation in favour of Hero Fincorp, a Rs 35 crore charge created against the security of book debts and receivables in favour of HDFC Bank etc. This could be in form fresh working capital and cash credit facility. There was also a charge created in favour of Yes Bank.
In order to obtain the licence for TV broadcasting, ARG Outlier provided a bank guarantee worth Rs 4 crore in favour of I&B Ministry. This bank guarantee will subsist during the tenure of the licence.
As on March 2019, ARG Outlier Media had Rs 43.50 crore indebtedness. There is a large amount indebtedness addition in FY19. The Hindi news channel Republic TV Bharat was launched during FY19. So, the debt could be due to the fact.
While the English news channel achieved EBITDA breakeven in its 1st year of operations, the Hindi news channel, launched in February 2019, is yet to achieve EBITDA breakeven. The company has to invest money in its digital platforms (website - www.republicworld.com, and mobile application - R.) , both of which will not immediately report profits as well.
One must remember that since both Republic being free-to-air (FTA) channels, the revenues of the company are largely dependent on advertisements. In 2017, ahead of Republic TV launch, 8 brands (Vivo, Jio Digital Life, Renault, Hike, Ola, Star India, Yes Bank and Microsoft) reportedly had decided to associate with the then upcoming television channel.
What kind of sales and profits/losses does ARG Outlier Media have?
Total income for FY19 for ARG Outlier Media was Rs 200 crore, up 27% from Rs 157 odd crore in FY18. According to ICRA, revenue profile of ARG is dominated by advertisement revenues, which accounted for 77% of its FY19 revenues. The loss after tax in FY19 was Rs 18.7 crore, a sharp increase from the loss of Rs 0.77 crore in FY18.
We must bear in mind that while the experienced management of ARG Outlier Media and the strong market position of its English news channel in a relatively short period in its addressable segment are positives, it is not immune to the initial gestation period of TV channels.
FY20 numbers will be crucial because they will show whether Republic Bharat enjoys increased advertisement revenues in full year of operations. Ramp up in its digital platforms will also be a key thing to watch out for. However, the vulnerability of an advertisement revenue-driven business profile always exists. There is a certain degree of cyclicality in advertisement spends by the corporates. Plus, the competition from news TV channel rivals is rising.
ARG Outlier's subsidiary SARG Global Digital Private Limited clocked a turnover of Rs 10.53 crore and loss was Rs 1.75 crore in FY19.
What are the company's top compensation details?
In terms of compensation, managing director Arnab Goswami was paid Rs 2.45 crore as remuneration while his spouse, Samyabrata Ray Goswami was paid Rs 44 lakh in FY19. Company secretary Mohit Dhamne received nearly Rs 57 lakh. Arnab's remuneration stayed largely flat compared to FY18. Samyabrata's remuneration went up by 20% from FY18 pay packet.
Also, ARG Outlier has a ESOP scheme. CEO Vikas Khanchandani was granted 3328 options. Vikas got a remuneration of Rs 2.53 crore in FY18 compared to Rs 1.38 crore in FY18, up a whopping 83%. Content & production head Charu Thakur was granted 2171 options, distribution and international revenues head Priya Mukherjee was granted 1447 options and CFO S Sundaram was granted 1447 options. The options granted are near FY18 levels.
The company paid a total of Rs 46.4 crore in salaries, wages and bonus in FY19, up 38% from Rs 33.6 crore in FY18.
Additional Reading
Arnab's India TV debate impact - https://www.aljazeera.com/programmes/listeningpost/2020/02/brash-bigoted-arnab-goswami-changed-india-tv-debate-200218072035580.html
Arnab’s Republic of Investors - https://www.thenewsminute.com/article/arnab-s-republic-investors-who-funding-goswami-and-what-means-55667
