9X Media restructures to fund expansion plans

The 9X Media Group is restructuring its channel ownership in order to streamline operations and raise funds for its plans for strengthening the regional channel portfolio. Under the new structure, it will transfer all existing regional music channels to its step down subsidiary INX Music.

INX Music was set up in 2011 when 9X launched its Punjabi music channel 9X Tashan. It is a joint venture between 9X Media and Sandeep Bansal, who also heads the Chandigarh business for multi-system operator Siti Cable. 9X holds 64% stake in the subsidiary while the rest of the stake owned by Bansal. As per the terms of the deal,. He also owns a devotional channel called Divya in his personal capacity.

When INX Music was created to run 9X Tashan, Bansal was offered 10% stake through sweat equity and the rest 26% through direct investment since he was directly involved in the operation of the channel. In case of 9X Jhakaas and the new channels that will be launched, Bansal will not be a part of the day to day functioning and thus will own the 36% stake completely through direct investment.

“We have approached the FIPB for permission to transfer 9X Jhakaas to INX Music and all the regional channels launched henceforth, will be under the subsidiary. This way, we mitigate the investments in our regional portfolio and in Sandip we have a partner we are comfortable working with,” says Bhupinder Makhi, CFO, 9X Media.

The parent company – 9X Media, currently has 5 music channels – 9XM (Bollywood), 9X Jalwa (old Bollywood/retro), 9XO (international music), 9X Tashan (Punjabi music) and 9X Jhakaas (Marathi music). It plans to launch 2 more channels in the regional space in the new fiscal – one Bengali and one Oriya channel. Sources reveal that if all goes to plan, then one might also see a Bhojpuri music channel from the INX Music banner.

An industry expert observes, “The restructuring makes sense for 9X Media. It faced a lot of challenge with its Marathi music channel since content acquisition was a tedious and expensive affair. By putting the new ventures in a JV, the risk is mitigated and in a way, funding for the new projects become more convenient. It may also improve valuations for future investment.”

Currently, New Silk Route holds 80% stake in the parent company 9X Media while 15% id held by Pradeep Guha. The rest of the stake is held by minority investors and key employees.

Founded by Indrani Mukerjea in 2007, the company was re-named 9X Media in 2010 as part of a restructuring process. It ealrier had a Hindi general entertianment channel 9X and a news channel NewsX. While the GEC was sold to Zee Entertainment Enterprises Limited in 2010, the news channel was sold to Indi-Media Network in 2009. 9X Media currently has only music channels in its portfolio.

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