Tariq Ansari, Mid Day's MD: I Never Closed the Door on Anyone
Image: Alok Brahmbhatt
Title: Managing Director of Mid-Day Multimedia
Education: Business Degree from the University of Notre Dame, USA.
Interests: Japanese, Ceramics, Boxing, Jazz and his twelve year old daughter Alya.
Presently wrestling with the question as to whether the Internet will make all traditional media obsolete faster than we expect.
How will the transition be for Mid Day Multimedia Ltd., a family owned company, post the share swap deal with Jagran Prakashan Ltd.? And what shall be your role in the near future?
Let’s first understand the share swap deal – it takes place at the holding company level. There is a listed holding company called Mid Day Multimedia Limited where my family owns 51 percent. The holding company has two operating subsidiaries, one for our print business and the other for radio. We first divided the holding company into two each of them holding one subsidiary each – one holds the print business, while the other holds the radio business under it. In each of these holding companies our share holding remains the same i.e 51% percent. Now with the current deal the print holding company merges into Jagran Prakashan. So the print operating company remains as it is, but simply moves from being a subsidiary of Mid Day Multimedia to become a subsidiary of Jagran Prakashan.
So the 51% my family owns gives us the shares of Jagran in the ratio of 2:7, we get 2 shares of Jagran Prakashan for 7 shares of our print holding company.
The other thing that happens is that the Mid Day print business shall still be run as it is. It’s not merging into Jagran Prakashan operationally. Yes, legally it has merged at the holding level but it still is an independent business unit for Jagran. And this is also what Jagran Prakashan wants, an independent operating business operated by the current management team including myself. They’ve made it very clear that “we would like you to continue with this business”.
Of course then there is the question of whether and how this will happen. But unlike other people, I have no other interests…this is what I know and do. You’ll never see me racing speed boats or cars or flying planes, I don’t do all that. So yes they would like me to continue, but more importantly the present Mid Day team will continue to operate the business.
And why did you do this deal?
Part of my job is to look into the future and plan for what this company will be like in 5 years from now. That’s what I get paid here for. And when I looked at what is happening at print business here and other parts of the world, development of broadband penetration, 3G and multimedia phones, a few things became very clear to me. Number one the share of advertising coming to print is going down. The total percentage of advertising coming to print is declining. And the last two years of downturn has hit newspaper business very hard. Yes, all media was hit but the newspapers were hit harder due to escalation of newsprint prices, increasing cost of talent and advertising revenues coming down. So share of advertising is coming down, talent is becoming more expensive and now beyond television, the online business will pick up and hire more talent. Also, if you look at the latest number of IRS, then you see that English metro papers are losing overall readership to. The growth in Indian newspaper readership is coming from vernacular papers like Dainik Jagran and Dainik Bhaskar in smaller towns.
On the other hand, the penetration of other devices like a cheap laptop or a multimedia phones combined with 3G and broadband will make delivery of content on these devices much faster and economical. So while I am not negative about future of newspapers but I believe that there are some challenging times ahead for the newspaper business. And everybody will have to make investments in the delivery possibilities of the new devices with no clear idea on the return on investments as of now. Today you design an application for iPad but tomorrow there shall be 30 more new tablets. So with many devices coming up, you still need to take these bets and make challenging investments – some big some small – and for that you need to have the resources. So the newspaper business is going to be about having the resources to transition the challenging period. All the newspapers have a challenging five year period to transition, but news papers will survive. What format? I don’t know. But in order to navigate the five year period, you need to have the resources to throw at it.
So when I talked to my family, I asked do we have the resources to throw at it? And I told them that we have three choices:
1) Either you have the resources and you throw at it, but there is no guarantee on the return on investment on these bets.
2) You can say I don’t have the money but I shall continue to run this business and hope for a miracle, for some killer idea or app that we shall come up with and be able to transition the challenging period.
3) Let this business be a part of a larger enterprise which is excited about newspaper business, which gets a benefit from your play in terms of their original play, and ensures longevity to your business.
So to my mind this option works better and lets us give better shareholder return.
But your business did have those resources at some point of time and you made attempts to grow your business in radio, films and TV. In hindsight, do you think they were before their time?
Yes I think some of them were before their time. We expanded in outdoor, we made one film and we expanded in radio. While radio is a longer gestation business but outdoor is so disorganized and dishonest a business that we a publicly traded company were not temperamentally suited for it. So yes we did try different things to grow the business but we were not able to. And we lost money, so decided to get out of outdoor and films while radio will need more time to make revenues. Some of these things are about timing and getting it right when the tide is high.