Apurva Purohit, president of Jagran Prakashan, speaks to Asmita Dey.
Earlier this week, Music Broadcast (MBL) that runs Radio City FM radio stations announced the acquisition of Reliance Broadcast Network (RBNL)’s Big FM stations at an enterprise value of RS1,050 crore. Music Broadcast is the radio unit of Jagran Prakashan. Apurva Purohit, president of Jagran Prakashan, spoke to Asmita Dey on how this acquisition will benefit MBL. Excerpts:
How will Music Broadcast gain from the acquisition of Big FM?
Clearly, the combined network will have the highest number of stations in the country, so that makes us the largest network. It will also have the maximum reach. The moment you are the largest in terms of footprint you get traction from advertisers. To an advertiser, you are not giving one existing and one new station, but two large existing stations with brand equity. We believe this will help us command a higher market share vis-a-vis advertisers.
Is there a difference in audiences of the two?
Big FM’s target group is older audience, typically over 45 years, whereas Radio City’s target group is younger, between 25 and 44 years. Both the target groups are complementary and will give advertisers an expanded consumer base. Of the 40 stations of Big FM that we will be acquiring, 30 are in cities where Radio City does not have a presence. The geographical reach is expanding for both of them. The ability to raise inventory utilisation and the ability to bring in the creative form of selling that Radio City is very good at are the areas where you will see revenue maximisation happening.
Will the workforce of Big FM be restructured post the acquisition?
Largely, they are going to be run independently. Marketing, programming and sales teams are going to be very much independently run. It is at the back-end that we will see some synergies.
How are you funding the acquisition?
The initial `200 crore will come from internal accruals of MBL. Then there is `500 crore of debt that we will be carrying on the books of RBNL which will be paid from RBNL’s internal accruals. And the balance will be paid out of long-term funding from MBL which will be in 2021.
How much of election spend did the radio sector get ?
The industry would have got around `30-40 crore from election advertising, about 10-15% higher than the previous election year.
What about Music Broadcast’s acquisition of Friends FM?
On May 24, we have withdrawn our application from the Ministry of Information and Broadcasting because we did not get the approval. It is off the table.