Unfazed by criticism of his SpiceJet acquisition, the scion of a political family says he believes in setting trends, not aping them.
The scion of a family deep-rooted in politics, Kalanithi Maran may well have raised a few eyebrows when he chose not to tread the beaten track and opted to foray into the then-fledgling television industry in the country. Last week, the media baron brewed up a storm once again when he left behind well-known names in corporate India to close a much-coveted deal with budget carrier SpiceJet.
Maran picked up 37.75 per cent stake in the airline — one of the two profitable carriers in the industry — at Rs 47.25 a share, after a discount to SpiceJet’s market price of Rs 56.05 a share. The deal values the stake sell at around Rs 750 crore. He has made an open offer for acquiring another 20 per cent stake in the company for Rs 480 crore. SpiceJet reported a net profit for the first time last fiscal with revenues registering 29 per cent growth to Rs 2,181 crore in 2009-10.
Critics have raised questions about his lack of experience in the sector. But Maran, who believes in setting trends rather than aping them, has been quoted in media refuting the industry perception about his latest venture.
“When I started satellite television, people laughed at me saying Tamil cannot be in satellite television, it’s too costly. When I started radio, they said television has come, radio is a dead business. When I started direct-to-home (DTH), they said there are too many big players. We are now 5.5 million subscribers strong. If I’m going to follow the herd, I’ll be one among the crowd... All my steps are calculated, I am not going blindly with intuition.”
It is this business acumen, perhaps, which has gone on to make Sun Network one of the dominant names in the media and entertainment industry in the country. While pursuing a course in business administration from University of Scranton, Pennsylvania, in mid-1980s, Maran was taken in by a wide array of channels, cutting across multiple genres, on offer in the US.
Back home in 1987, he worked for a while on his father’s magazine Kungumum before going on to make his debut in the audio-visual space with monthly news video “Poomalai”. However, frustrated by rampant piracy and egged on by his vision to start his own bouquet of channels in the country, then 27-year-old Maran launched Sun Network in April 1993. The industry at that time was largely dominated by the state broadcaster even though some private players such as Subhash Chandra’s Zee Entertainment Enterprises had begun to emerge in the field.
The big break came in 1998 when India liberalised the satellite broadcast industry. Sun Network was among the first to get a licence.
And, as they say, there has been no looking back since. Detractors attribute Maran’s rapid rise to his family’s strong presence in national and state-level politics. Maran’s father Murasoli Maran was the Union Minister for Commerce and Industry between 1996 and 1998 in the Deve Gowda and the Gujral governments and again in the Vajpayee government from 1999 to 2002. Maran’s family has long controlled the Dravida Munnetra Kazhagam (DMK) party.
For a Tamil TV channel, distribution is king, not content, say media industry insiders; Maran has a stranglehold over cable distribution in Tamil Nadu, a factor his competitors claim is the real reason for Sun’s dominant market share there.
But Sun’s business today stretches much beyond the apparent “home ground” of the organisation. With a bouquet of 20 channels in four languages, Sun TV today reaches out to over 95 million households in India. Overseas, the channels are broadcast in 27 countries, including the US, Europe, Singapore, Malaysia, South Africa, Australia and New Zealand. Also in Maran’s possession are 48 FM radio channels, two Tamil newspapers and four magazines.
Dinakaran, a morning daily in Tamil, sells 1.2 million copies a day. Sun Direct, the network’s DTH arm, has around 5.5 million subscribers. Sun Pictures has released 15 movies till date — all of which have scored well with audiences. Sun Picture’s first production venture — Endhiran (Robot), starring Rajnikanth and Aishwariya Rai Bachchan, is awaiting release.
Maran listed his company in April, 2006 to raise around Rs 600 crore for launching new TV channels, FM channels and to finance the construction of a new corporate office. When Sun’s IPO document was filed with the regulator, a BJP MP sent a letter to the Prime Minister’s office raising questions about Dayanidhi Maran’s conflict of interest. Dayanidhi was the Minister for Communication and Information Technology at the time.
Kalanithi Maran is the highest paid CEO in the country. Maran and his wife Kaveri were remunerated a little over Rs 37 crore each last fiscal. Interestingly, this is despite the two capping their collective salary at Rs 74.16 crore, about 22 per cent below their entitlement of Rs 94.80 crore for the year.