Billionaire Michael Bloomberg, the latest and arguably most high profile candidate to join the US Presidential race, is all set to break his eponymous news & data behemoth Bloomberg LP’s joint venture with Raghav Bahl’s Quintillion Media, paving the way for conversations with other media groups in the country.
Bloomberg is believed to have approached other Indian groups for a possible tie-up, presaging curtains for its third planned TV stint in India – BloombergQuint -- people familiar with the matter told Moneycontrol News. Bloomberg’s two previous attempts at operating a business TV channel in India, the first with Ronnie Screwvala’s UTV and later with the Anil Ambani group, came unstuck.
These highly placed sources said Bahl’s inability to secure a television licence despite trying for it since 2016 and allegations of tax evasion and bribery (which Bahl has denied) have rattled the Bloomberg LP founder, who is hopeful of being the Democratic nominee for US President against Donald Trump in 2020.
A detailed questionnaire elicited a one line response from Bloomberg LLP: “Bloomberg remains committed to the India market and to our partnership.’’
Raghav Bahl, on his part, said suggestions of his company’s venture with Bloomberg ending were “falsehoods and wrong assertions”.
“It seems to be at the behest of vested interests who are apparently resentful of the success of BloombergQuint, which has created a strong footprint in the digital space. We are confident that as soon as our broadcast licence is approved, we shall replicate that success in the broadcast market and go further. Since the content of your mail lacks credence and is motivated by vested interests, we do not wish to state anything further,” Bahl said in an emailed response to a questionnaire sent by Moneycontrol. Bahl, one of the pioneers of business TV journalism in India, is the erstwhile promoter of Network18, which runs Moneycontrol.
Bloomberg’s latest attempt at launching an Indian business news channel now lies in shambles after more than two years of its soft launch. BloombergQuint started as a cutting-edge digital product three years ago with the aim of launching a 24 hours business channel.
The 26:74 joint venture with Bahl as the majority partner is seeing increased staff attrition and is racking up losses, which has led it to cut costs and reduce markets programming on Facebook and also content around its digital offerings, according to former employees and industry watchers.
The parting of ways between Bloomberg and Bahl’s Quintillion Media is a direct fallout of the Indian entrepreneur’s failed attempts at securing a business broadcast licence. Bahl has been rebuffed by the Indian government due to his application’s lack of clarity on many counts, say sources familiar with the situation.
Once it became clear that the original application for a broadcast licence was getting delayed due to security and other clearances, Bahl decided to circumvent the process by buying a shell company – Horizon Satellite Services – that held a news broadcasting licence. His plan was to seek government permission to reboot Horizon, change its name and the board of directors and relaunch it as BloombergQuint, said one person familiar with the dealings.
The government was unmoved as the security clearance of the board members was still pending. And there were allegations of other irregularities such as tax evasion and bribery charges, according to media reports. These have been vehemently denied by Raghav Bahl in the past even though he chose not to reply to these specific points posed to him in the Moneycontrol questionnaire. Bahl has recently moved sector’s top court, the TDSAT, to get a direction on his application.
For Bloomberg, there seems to be a jinx in its choice of Indian partners. Its earlier foray in 2010 was with entertainment entrepreneur Ronnie Screwvala, who wanted to set up an English language business channel to compete with the market leader CNBC-TV18. Screwvala, who has sold most of his successful ventures, then morphed the business news JV into BTVi, as it was then known, transferring his stake to industrialist Anil Ambani. BTVi shut down recently after its JV with Bloomberg broke three years ago.
Meanwhile, Bloomberg LP runs a successful business in India, with its more than 4,000 terminal connections in the country, each fetching it around $2,000 dollars a month and adding up to around Rs 650 crore in annual revenues. Bloomberg wants a substantial toehold in the Indian television space as the billion-plus aspirational population is perhaps the last bastion of sustained growth. Only 2 percent of India invests in equities compared with 55 percent in the US.
With questions surrounding the BloombergQuint JV, Bahl has had to trim operations and delay vesting of stock options and increments this year.
Indian regulations forbid 100% foreign ownership of news entities. They require the local partner to control 51% percent of the venture. For the moment, India’s business television market is a three-horse race. Network 18, the owner of Moneycontrol, runs the leading two channels in English and Hindi – CNBC-TV18 and CNBC Awaaz. The Times Group runs ET Now, which competes with CNBC-TV18, while Zee Group runs Zee Business, which trails Awaaz in the Hindi business TV channel space.
Bahl started BloombergQuint as a digital venture with fanfare, hiring top business television journalists, offering them hefty premiums to their then salaries. They were promised a global newsroom and stock options that could yield a windfall in case of a dream listing on the stock exchanges. The ESOPs, which were to be vested at the rate of 20 percent a year over five years, have so far remained a promise only on paper. Meanwhile, salary increases have also stalled.
Amid all this, both Bahl and Quintillion have been in the cross-hairs of a series of intrusive probes from government agencies such as the Income Tax Department and the Enforcement Directorate. He has been accused of tax evasion and money laundering, allegations Bahl has denied vociferously.