The year 2022 was surely interesting for Media business - specifically News (Digital & Broadcasting) business. There was a big rumble around TRP rigging with 8 media outlets being accused. Republic TV more specifically Arnab Goswami was made the centre piece by the then ruling political dispensation. Subsequently the fiasco of “The Wire” involving a suddenly sane and then not so sane reporter putting together a scandalous story which was conveniently disowned by owners and editors of “the wire”. And the mother of all – NDTV acquisition by Adani Group.
To add a Bollywood style masala entertainment an international star was introduced in the mix by the name of Salvatore Babones. Most of the news media, which is postured to be against the current political dispensation helming the Union of India, was very unhappy with the positive narrative Mr. Babones was promoting about India. He started seeming like the character “Elizabeth Russe” of famous “Lagaan” movie – i.e. foreigner supporting Indian cause against the belief of larger set of Indians.
My curiosity was piqued when Mr. Babones specifically pointed towards one of his interviews with a Digital Media outlet – Newslaundry. Abhinandan Sekhri, Co-promoter and host of Newslaundry, seemed quite abrasive and dismissive of his international guest. Credit to rustic Indian champaran villagers of Lagaan movie, Elizabeth Russe was treated a lot better and with dignity despite not trusting / liking her.
Given my finance background, I tried running a check on Newslaundry’s backers and came up with something interesting. The company was set up in January 2013 by 4 persons with initial capital of about INR 19 lakhs. Things were silent until February 2016. Suddenly about INR 3.15 crores was introduced as capital by Omidyar Network into the company for 17% stakes. Later in July 2018, Madhu Trehan (sister of India Today owner who has her own claim as professional journalist and also was one of the co-founders of News Laundry) introduced INR 2.7 crores as equity and INR 1.44 crores as loan. Vikram Lal (mostly linked to eicher motors group) invested INR 92 lakhs during this same period. Thus total investments into the company, Newslaundry, from February 2016 to January 2019 was about INR 9 crores.
As goes with all Bollywood stories there is a Samba for every Gabbar Singh. In this case I found – Toque content – owned by similar set of owners as Newslaundry. Omidyar infuses INR 3.18 crores and a new investor - Sid Yog invests INR 6.17 crores in Toque in October 2019. It needs to be noted that Toque starts only in June 2018 and had no meaningful revenues to drive home until March 2019.
Abhinandan Sekhri postures as a very intelligent person to question motives and understanding of Mr. Babones. However it needs to be noted that Abhinandan has made cumulative losses of INR 9 plus crores in Newslaundry until FY 2021-22 (which he tries to hide in annual report through inappropriate disclosures). As possibly one method of sprucing up Newslaundry profits, Toque content was shown as “using” Newslaundry for certain services and pays about INR 1 crore in FY 2020-21. He was drawing salaries from this company in excess of INR 40 lakhs per annum in certain years. As of FY 2020-21 Abhinandan’s salary was down to INR 2.3 lakhs for obvious reasons. Despite being highly paid, he couldn’t identify problem with his own business model or put course correction to the same to become profitable over 5 long years.
Madhu Trehan, I guess, understood that this would not work out and there is nothing left to salvage in Newslaundry. She, I believe, gracefully exited Newslaundry in 2020-21 by transferring her stakes to other founding shareholders. She however retains her stake in Toque as there is some money (or unexplained connection) still remaining to be salvaged in Toque.
In nutshell, few questions left for readers to answer for themselves:
1. Why would venture investors like Omidyar, Sid Yog invest in excess of INR 11 crores in news media outlet which is making losses and doesn’t have proven management?
2. Is Madhu Trehan’s exit (duly noting that she has crossed 70 years of age) signaling something more than retirement as reason?
3. Is the ruckus around Mr. Babones interview, Abhinandan’s way to get back some limelight and thus some eyeballs, site visit, advertisement money!!!!!!
Surely Abhinandan has not proved to be intelligent in his own case to go out and judge the world. I would close out by stating the Bollywood dialogue – “Jinke ghar Shisheke hote hain, unhe phatar nahin phenkna chahiye”.