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Will 21st Century Fox up its stake in Tata Sky?

MUMBAI: Will Rupert Murdoch-
controlled 21st Century Fox increase
its stake in direct-to-home (DTH)
operator Tata Sky?
21st Century Fox will be talking to
joint venture partner Tata Sons to
bring about some changes in the
shareholding structure. The definite
proposals are not clear at this stage.
Tata Sons owns 60 per cent in Tata
Sky while 21st Century Fox
effectively holds 30 per cent. The
remaining 10 per cent is held by
Temasek Holdings. The DTH operator
has more than 11.5 million
“The Tata Sky business is different
because it’s a 30 per cent
shareholding and we are partners
there. We have to see what the
future holds. What the shareholding
and capital structure there looks like
remains to be seen. We will be talking
to our partners. You will probably see
some changes there,” 21st Century
Fox chief executive officer James
Murdoch said.
According to James Murdoch, Tata Sky
is a tremendous business that can be a
real contributor to the conglomerate
going forward.
He also feels that the Indian DTH
sector, which has six private players,
could see consolidation. “The Indian
DTH sector will probably see some
consolidation in the medium term and
there are still one or two too many
but we are growing really well,” he
TelevisionPost.com had earlier
reported Tata Sky’s FY14 financial
performance. The company’s net loss
in FY14 stood at Rs 280.41 crore (Rs
2.80 billion) compared to Rs 378.93
crore (Rs 3.79 billion) a year ago.
Profit (before depreciation, finance,
tax and prior-period items) jumped
115.45 per cent to Rs 591.28 crore
(Rs 5.91 billion), as against Rs 274.44
crore (Rs 2.74 billion) in FY13.
Almost ruling out the possibility of
listing the India business in future,
James Murdoch stated that 21st
Century Fox wants to avoid
complications. Star India runs a
strong entertainment and sports
broadcast business in India.
“Generally speaking, we [21st
Century Fox] have been on a path to
simplify our business and to simplify it
around these investments in bigger
chunks. I think all of us need to be
cautious about creating new
complications, new public
shareholdings and so on and so forth
as we go forward. Certainly, it is one
of the things that we want to
highlight and something that it has
got incredible prospects going
forward,” he added.
He was also confident that the Star
business would start generating cash
flow in 5–10 years once sports
investment started showing results.
“We think we are going to show really
good cash flow growth from the Star
businesses and we will highlight that
to our investors and hope they
understand that it is a real
contributor to our growth over the
next number of years,” he said.
James Murdoch was speaking at the
Goldman Sachs 24th Annual
Communacopia Conference in New
On another occasion, James Murdoch
had stated that if Star India kept
investing in putting more creative and
innovative content on screen, it would
become a $1-billion EBITDA business
by the turn of the decade. The
company is hopeful of touching $500
million EBITDA by FY18.
Star India, which broadcasts more
than 40 channels in seven languages,
has made significant investments in
sports ever since it took over the
India business of the erstwhile ESPN
Star Sports. Apart from acquiring
cricket content from the BCCI and
ICC, the broadcaster has invested in
local leagues like kabaddi, soccer,
badminton and hockey.
Earlier, the broadcaster had entered
the Telugu market by acquiring Maa
TV’s broadcast business for $375
million. Prior to that, it had
completed the acquisition of Asianet

Will 21st Century Fox up its stake in Tata Sky?

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