RIL Take-Over Of Network18: Why Does It Make The Media Nervous?

Submitted by admin on Mon, 07/14/2014 – 11:22

Media coverage of the recent acquisition of media group Network18 by Mukesh Ambani’s Reliance Industries Limited was muted. While some chose to skip the news altogether, others appeared cautious. The majority saw this as the end of media independence in India, and raised serious concerns about credibility and Press freedom. Is the fear factor justified, asks Simran Sabherwal

On July 7, 2014, as the Mukesh Ambani-owned Reliance Industries Limited (RIL) announced that it had taken control of Raghav Bahl’s Network 18 Media & Investments Ltd and its subsidiary TV18 Broadcast Ltd, the media industry went into defence mode. Though the deal had been the talking point internally within the industry for some time, media coverage for the acquisition itself was restrained, even as Twitter and other social media platforms sought to find reasons and voice fears about it. While the Print and Digital platform did cover the take-over of the media company by India’s largest private sector firm, Television by and large chose to ignore the issue, leading to veteran journalist Kuldip Nayar’s comment in the Deccan Herald: “I was not surprised when TV channels did not cover the taking over of a large TV news network by Mukesh Ambani’s Reliance Industries… What has taken me aback is that the Press has reported the deal, but preferred to keep quiet. Even though journalism has ceased to be a profession and has become an industry, I was expecting some reactions, at least from the Editors’ Guild of India.”

Despite the cautious approach adopted by most, some in the media have actually questioned whether the media scene in India will ever be the same again. Large corporates investing in media has been the norm in India, even before Independence, therefore this question: What makes the RIL acquisition different from the rest?

DEATH OF MEDIA INDEPENDENCE?
Call it irony, but this was the headline given by Megha Bahree, a contributor in Forbes Asia, the Indian edition of which is a major asset in the Network18 stable: “Reliance Takes Over Network18: Is This The Death Of Media Independence?” In two words: Quite likely.

Independent journalist and educator Paranjoy Guha Thakurta (whose book The Gas Wars, a critical account of Ambani’s gas business, led to a Rs 100 crore defamation suit by RIL) says that while RIL’s decision to wrest full managerial and editorial control over the Network18 group was not unexpected, (as the company had invested heavily in the media conglomerate in 2012), what is surprising is the speed with which the core team, including Raghav Bahl, Network18 Group’s principal promoter, quit.

Writing in the Economic&Political Weekly, Guha Thakurta says, “What Reliance has achieved by becoming the biggest player in India’s mass media industry is that it has enhanced its ability to influence public opinion through the media, thereby also strengthening its hold over the working of the country’s political economy.” He adds that the consequence of RIL strengthening its association with Network18 will lead to a clear loss of heterogeneity in the dissemination of information and opinions and that media plurality in a multicultural country like India will diminish. He writes, “The space for providing factual information as well as expressing views that are not in favour of (or even against the interests of) India’s biggest corporate conglomerate will shrink, not just in the traditional mainstream media (Print, Television and Radio) but in the new media (Internet and Mobile telephony). There is growing concentration of ownership in the country’s already-oligopolistic media markets. In the absence of restrictions on cross-media ownership, these trends will inexorably lead to the continuing privatization and ‘commodification’ of information instead of making it more of a ‘public good’ that could benefit larger sections of society, in particular the underprivileged.”

RIL & MEDIA: AN UNEASY RELATIONSHIP
When RIL first announced its desire to invest in Network18 in January 2012, it looked to address concerns of editorial influence in its media release which stated, “Bahl and his team will continue to have full operational and management control of both the companies… Bahl and the current promoter entities of Network18 and TV18 will continue to retain control over Network 18 and TV18.”

However, media reports paint a different picture. According to an Outlook report, ‘Big ED In The Chair’, when Forbes India took a light-hearted swipe at the children of the RIL Chairman in an irreverent column, titled Insnider, Manoj Modi, the right-hand man of Mukesh Ambani, threatened to press criminal charges against the then editor of the magazine, Indrajit Gupta, if he did not reveal the source of the snippet. His chilling threat was: “I’m not going to leave, or forgive, the people responsible for this personal attack on Mukesh Ambani.”

The matter was eventually settled when an “acceptable solution” was hammered out and an apology was published on the letters to the editor pages (and not in the editor’s note as demanded). In a cheeky note, Outlook reiterates, “And yes, Manoj Modi is running the show at Network 18 now.”

In his article, “The Network Effect”, in the Caravan magazine, commentator Rahul Bhatia writes, “Reliance’s name provokes a certain kind of reaction among the media in India. The reaction, more often than not, is to proceed with caution. This prudence applies to stories about the company and its interests, as well as to its controlling family, the Ambanis, regarding whom every word that makes it into Print is treated with unparalleled care… Big business has always been well-disposed to the idea of proactively controlling the message, but Reliance’s recent approach – that of controlling the medium—is a rather more elaborate precaution than Indian corporations have taken before.”

Bhatia also cites an incident in 2011 when a cover story in Forbes, on SEBI investigating reports of insider-trading charges against the Ambani brothers, was dropped at the last minute much to the surprise of the magazine’s senior editors. Caravan states further: “Later, in a review meeting with the staff, Bahl took responsibility for the inadequate replacement cover, but did not explain why the story wasn’t carried. Bahl did not disclose that Network 18 and Reliance—which had been mentioned in the story for its troubles with SEBI—were very likely in talks that same February about a Network 18 bailout.”

Outlook also cautions that the takeover of Network18 raises issues for news management in the country, given RIL’s well-known aggressive stance against media houses and publications that run counter to its business interests. The magazine also raises a valid point when it says, “But strangely, there appears to be very little debate about the implications—on public policy, lobbying, regulations—of such a take-over.”

In her article, ‘The Reliance-Network18 affair’ in the Business Standard, Vanita Kohli Khandekar says that there are two dimensions to the affair – the corporate ownership of media and the ownership of media by RIL. Stating that media companies globally have been owned by corporates, politicians, real-estate barons, businessmen… even religious gurus launch newspapers and TV channels, she asks “What is the basis of Ambanis owning a news channel?”. She states, “The worry, rightly, is on Reliance’s sheer size and the span of its heavily policy-dependent portfolio – petroleum, gas, retail – and the potential conflict of interest this could create.” Allaying fears on the stance that Network18’s news channels will now take over, she adds that “an open-minded entry policy” helps have a mix of voices. Kohli Khandekar also has three suggestions that include having an independent-of-the government media regulator with powers a la Federal Communications Commission (US) or Ofcom (UK), a law that forces any organization in the news business to publish its accounts and every detail of who owns it, how it is funded, its revenues, and so on at fixed periods, online and a high-quality, independent, tax-payer funded broadcaster.” She also reflects that “For a noisy news market, it is amazing how little we self-reflect on journalism and where it is headed. Fixing that should be our big worry.”

WHY IS RELIANCE SO ANGRY?
Commenting in Forbes Asia, journalist P. Sainath says, “The greater the monopolization and corporatization of media, the less the space for smaller voices, differing voices, dissenting voices.” He adds, “Media was the adversary. It would take on those in positions of power, whether in government or the corporate sector. Time alone will tell how that adversarial role will exist under these sort of corporate deals.”

Sucheta Dalal, Managing Editor of Moneylife, writes in an article, “Why is Reliance so angry?”. In the recent past, Reliance has made news for all the wrong reasons. She writes, “Ambani, who has been awkward in handling the media, is not winning any friends by reacting like a wounded tiger. He has shot off multiple legal notices to journalists across the media for their reportage on gas pricing and other issues (including two to Moneylife editors). More importantly, he probably made history as the first media owner to slap defamation notices on his own editor-in-chief.” She adds, “Appearing to gag free speech by using its enormous financial clout bodes ill for RIL. No government can be seen to support this attitude—especially one that has promised better days to the people. But when this aggressive and negative strategy fails to work, it does even more damage to RIL itself.”

ALLAYING FEARS ALL AROUND
To allay these fears, the new management at Network18 which took over on July 7, held a meeting with all the staff at TV18 in Delhi and Mumbai on July 8 and 9 respectively. As per reports, the management – including Alok Agarwal, Rohit Bansal and Umesh Upadhyay – reassured employees about RIL’s honourable intentions and objective to make Network18 a global brand. Reports also say that CNBC-TV18 employees were told that they need not fear publishing any story and can even report on RIL, but shouldn’t publish stories without facts.

While a lot of people are anxious about the latest happenings in the media landscape, Sunil Lulla, Chairman and MD of Grey Group India, believes that this investment is good for the overall media industry, particularly Television news, which has been bleeding of late. He says, “The media business should see this as a very good sign because after many years, a serious player has made such a deep investment in a strong media group. The industrialist probably sees great value in media as a sector and believes it will grow, which is a great sign and a great opportunity. It tells other industries that media is a sector they should think and consider. As a sector, Television should herald the fact that a serious player has entered the game.” On worries of editorial influence, Lulla sums it up saying, “Just because there is a stakeholder interest does not mean that it is being used to influence the media. Without having facts on that, it is very incorrect to make those assumptions.”

Why Now?
At its fortieth annual general meeting (AGM) held recently, RIL announced that the long-awaited 4G broadband network, Reliance Jio, will be rolled out next year. Speaking at the AGM, Mukesh Ambani said that a limited set of trials for Jio is currently under way and expanded trials would begin from August, 2014. He stated, “The year 2015 will see the phased launch of Reliance Jio across India. Millions of customers would have started to use the digital platform and services in their daily lives. The fruits of the tremendous value created by this (Jio) – Rs 70,000 crore – would start to flow”. A key driver which will fuel this growth will be leveraging synergies with Network18 and the content from spanning genres for distribution through broadband technology. When the company announced its acquisition, it said in a press release: “The acquisition will differentiate Reliance’s 4G business by providing a unique amalgamation at the intersection of telecom, web and digital commerce via a suite of premier digital properties.”

On its launch, the Jio broadband service will cover all states – i.e., 90% urban India and 215,000 villages, which will later be extended to cover over 600,000 villages. Ambani also stated, “Reliance Jio will be one of the largest job-creating and wealth-creating business initiatives in India.” He added “Millions of new entrepreneurs and jobs can be expected to spring up in the tertiary and secondary sectors in new and innovative digital enterprises and services.” Commenting on the acquisition of Network18, he said, “The acquisition is through an open offer of Network18 media and investments and its subsidiary TV 18 broadcast by Independent Media Trust, the sole beneficiary of which is Reliance Industries.” He also emphasized that the acquisition would strengthen its 4G business at the intersect of telecom, web and digital commerce and the media through a suit of premiere digital properties.

However, it must also be noted that the Comptroller and Auditor General (CAG) recently stated that the nationwide broadband spectrum of the company should be cancelled for allegedly rigging the auction and violating rules. On its part, RIL has rejected any suggestion that spectrum was acquired in any manner other than through a transparent bidding process duly supervised by the Government as per news agency reports. Business newspaper Mint also reports that another reason is “to get a grip over the whole gas pricing affair”. Quoting a Network18 official, the business daily says that Reliance wants to ensure nothing goes against them in this regard and having “complete control over one of the largest media companies in the country, with a presence across Television, Print and Digital, helps to put across one’s point of view.”

TWITTERAMA

Rohit Bansal @theRohitBansal
– They’re NGOs! 🙂 RT”@hiren_r Everybody worked up abt Ambani takeover of #NW18. Ownership of media by Jain, Dalmia, Birla, Raheja is fine.”
– “@rupasubramanya Innuendo & guesswork entirely. Not one source named in the piece. But hey this is journalism for you in India” true

Gautam Chikermane @gchikermane
-A part of the story that #AllegationPolitics ignores @PaPaFunkk: @gchikermane it was raghav who approached reliance not the other way round
– And when arguments or facts fail, soldiers of #AllegationPolitics bring their fav weapon – name calling.
Looks like an interesting Sunday.
– @rupasubramanya @Outlookindia Allegation politics and innuendo journalism make good friends, natural allies.
– Double standards have a new benchmark – #RIL as a corporate owner is not OK but builder Rajan Raheja as @Outlookindia owner is just fine!
– Amused to read @Outlookindia story on #RIL taking over #NW18. Strange stance from a group owned by a builder.

Sagarika Ghose @sagarikaghose
– Press freedom in jeopardy across globe,acutely so in India:media is all about credibility,once lost, gone forever.
Freedom=credibility=value
– Couldn’t stop my tears in newsroom today:we made such exquisite music for 9 yrs.All at CNNIBN:Will miss you and always wish you the v best!
– “You gotta know when to hold on, know when to fold up, know when to walk away, know when to run. No regrets!
Wishing new N18mgmnt all success!”

Rajdeep Sardesai @sardesairajdeep
– When there is no freedom, there is no creativity. Gnight, shubhratri.
– So, now some news channels have ‘censors’ sitting in their office, telling them what can/cannot be carried? Whither journalism?
-Emotional afternoon with my colleagues across the IBN network. The tears said it all! Thank you guys! Goodbye and good luck!
– Proud of what we achieved at IBN 18. Built channels from scratch that put journalism first. Will treasure the journey.
– After 9 wonderful years, time to move on from IBN 18. Will miss all my colleagues who made it so special.

Sanjay Arora @chiefsanjay
– The gory story of how Reliance took over Network18 aka CNN-IBN etc. Must Read. Media freedom is a myth. http://www.outlookindia.com/article/Big-ED

Arvind Kejriwal @ArvindKejriwal
– A must read. Pl RT and spread it as much as u can. http://www.outlookindia.com/article/Big-ED-In-The-Chair/291311

Sadanand Dhume @dhume
– This innuendo-heavy Outlook story on Reliance implies that CNN-IBN batted for Modi ahead of Indian elections.
[Ha!] http://m.outlookindia.com/article/Big-ED-In-The-Chair/291311/?maneref=http%3A%2F%2Ft.co%2FOGro2n58eC

Sucheta Dalal @suchetadalal
– We’ll c much hand-wringing. But free media & real activism need financial support:can’t survive of love & fresh air: http://tinyurl.com/nrs92oy
– Outlook writes on Ambani takeover of TV18 Group: http://www.outlookindia.com/article/Big-ED-In-The-Chair/291311
… . Well, you can’t silence all. Only when fat pay checks involved!

Sangeetha @SangitaSri
– News that you can Reliance on! #Network18

– See more at: http://www.impactonnet.com/RIL-Take-Over-Of-Network18#sthash.1TmPKkuG.dpuf

http://www.impactonnet.com/RIL-Take-Over-Of-Network18

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s