Why Sankeshwar wants to sell Vijaya Karnataka

PALINI R. SWAMY writes from Bangalore: The formal announcement has still not been made. The actual price has still not be revealed. The modalities of the sale have still not been firmed up. And, indeed, the actual buyer's name has also still not been officially divulged.

But the question on everybody's, or at least every mediaperson's (and reader's) lips across the State is: just why does Vijay Sankeshwar seem to be in such a tearing, even desperate, hurry to wash his hands off Vijaya Karnataka, Vijay Times and Usha Kirana?

Especially when Vijaya Karnataka is No. 1 and when Vijay Times is close to being No. 2?

Especially when as a transport operator from smalltown Hubli he has succeeded in doing what such top-notch business names as the Ambanis, the Thapars, the Singhanias have all majestically failed at?

The charitable view is that he is just being a good businessman. Insiders who know his mind say he entered the media business with no more noble an objective than to make his money grow. He had no great interest in promoting Kannada or journalism or both.

As a savvy businessman, he merely saw an opening in the kind of Kannada journalism it was getting through Praja Vani, Kannada Prabha and Samyuktha Karnataka, and got in—and got lucky.

Therefore, they say, with the media market red hot just now, especially in crowded Bangalore, with buyers willing to give him more than twice the money he has pumped into the three papers over the last five-plus years, he sees a golden opportunity to take his cash and leave.

Indeed, those who subscribe to this view say Sankeshwar had been preparing for a sale for at least two years. The consulting compay Ernst & Young was called in (briefly) to do the due diligence for making presentations to investors, Indian and foreign.

In other words, from day one, Sankeshwar had an exit policy. All he was waiting for was the right numbers to be dangled in front of him. That time is now.

The not-so-charitable view is that Sankeshwar, typically for a businessman unaware of how journalism works, has run out of patience.

Those who subscribe to this view say that the transport operator who is used to instant profits from his investments was getting increasingly frustrated at the long gestation periods of his papers.

The Sankeshwar camp says that he has pumped in Rs 60 crore so far, but media watchers say this is a conservative estimate. The figure could be in excess of Rs 100 crore.

The Sankeshwar camp says the papers, which they claim fetch around Rs 7 crore per month in ad revenue, would have turned in profits from May next, but media watchers say that date is too optimistic given the investments made and the costs it has taken to achieve what the papers have.

In the end, though, Sankeshwar may be itching to sell because he overreached himself and got too ambitious.

Vijaya Karnataka, whose marketing, circulation and editorial tactics (including to the extent of having the designation Executive Managing Editor) was modelled on The Times of India was a quick, unsurprising and maybe even deserving success.

But Sankeshwar, feel media watchers, bit off more than he could chew by launching Vijay Times even before Vijaya Karnataka had stabilised, and following it up with a second Kannada daily, Usha Kirana. Result: none of the three papers are in the pink of health, with one subsidising the other two.

Vijay Times today claims an ABC circulation of over 150,000 copies a day and a readership of nearly 450,000 readers. And is ostensibly snapping at the heels of Deccan Herald by being the No. 1 paper in 24 of the 26 districts outside Bangalore.

But it has come at a very heavy price. The cut-price paper is dumped heavily, has heavy overheads, and what little advertising it attracts is grossly subsided if not a trickle-down from advertisers who opt for a package deal with Vijaya Karnataka.

As the saying goes, circulation sells and advertising pays, and Sankeshwar was getting next to nothing from Vijay Times.

The Sankeshwar camp says Vijayanand Printers Limited is losing Rs one crore a month. Media watchers say the real figure could be double that, much of it coming courtesy Vijay Times.

But the last straw could have been Sankeshwar's ambition in launching Usha Kirana. Insiders say there were four reasons behind its launch:

1) To be the No. 1 and No. 2 Kannada paper in the State,

2) To prevent competitors from chipping into Vijaya Karnataka's circulation by using Usha Kirana as a buffer,

3) To provide a lower priced option to a new set of readers,

4) To provide a cheaper advertising option to advertisers wary of Vijaya Karnataka's reach and ad rates.

There may also have been a secret fifth reason. Sankeshwar wanted a paper in his stable when the time came to sell Vijaya Karnataka and Vijay Times.

But media watchers say Usha Kirana has failed in all its objectives. It is not taken off, it has in fact chipped into Vijaya Karnataka's circulation, it attracts next to no advertising and nobody buys it.

Shutting down Usha Kirana alone won't to do. Selling off Vijay Times alone isn't too attractive to any buyer and it won't fetch much anyway.

Result: Vijaya Karnataka has to be added to the platter.

Getting rid of his media diversion enables Sankeshwar to concentrate on his transport empire. Vijayanand Roadlines Limited has big plans of expansion, including a planned listing through an IPO. Getting rid of Vijayanand Printers Limited may have been strategic to that move.

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15 Responses to “Why Sankeshwar wants to sell Vijaya Karnataka”

  1. kumar Says:

    None can flourish who have an intention of Killing others. And Running a Newspaper is not a JOKE. A Journalist or a Newspaper Publisher should be ready to sacrifice himself for Truth. Does Sankeshwar has these qualities?.

  2. madan mohan Says:

    The reason is simple. He wants to sell because it is a good business proposition, especially because there is tearing competition between two of the powerful media groups for a slice of cake in Kannada journalism.

    the apple of the deal is the No. 1 position of Vijay Karnataka among Kannada and the virtual No. 2 position of the Vijay Times. Like any other present day marketing trend, if one one buyes one, he can get two others free. For buying Vijay Karnataka, the Vijay Times and Usha Kiran could be offered free.

  3. ravi Says:

    Mr. kumar,

    Show me one newspaper publisher today, who is ready to sacrifice himself for Truth.

  4. H.R.Bapu Satyanarayana Says:

    Probably it was one paper which started with noble ideals of reflecting truth and with some journalistic ethics. But Sankeshwar realised the hard way that truth does not sell and got tired of it and he saw everybody is making money . So he fell in line for he knew the principles do not matter.

  5. Rajesh Says:

    Its a good move

  6. kumar Says:

    Mr. Ravi,

    Shri. Siddharamesh the late Editor and Founder of KRANTI sacrificed his life and was killed by POLICE OFFICIALS FOR Exposing them and this has been proved by the Court of Law after a Legal Battle of 23 Years.

    All the Newspapers and TV Media did cover the News.

  7. kumar Says:

    KRANTI Still Stands for TRUTH AND THE YEARS HAVE BEEN THE EVIDENCE.

  8. Anil Kumar Says:

    The debate here must have been restricted to the sale of Vijay Karnataka newspaper. But I am pained to read bloggers have been using this forum to settle their personal scores with the newspaper’s editor. If the allegations are to be believed that Vishy has been fooling his own Master and fellow journos for quite some time. But how can any editor fool his readers for such a long time. VK scaled new heights under Vishy’s stewardship. Its mind boggling 6.00 Lakh++ Circulation and 10 times the readership. Why not we accept that Vishy has some good leadership quality which has made VK a roaring success. But for his contacts, the content of the paper would not have been better.
    The rumours of Vishy blackmailing his own Master are all baseless. Sankeshwar is a shrewd businessman and has no great comulsions to keep Vishy if he were to be a liability. The paper and its owners needed him more, and as a matter of fact he was the darling of every Kannada newspaper in the market. It is unfortunate that oldtimers who can not tolerate achievements of an youngster like Vishy Bhat have started mud slinging through this blog.
    How many editors of Kannada Newspapers can bring columnists like Sharada Prasad, Ravi Belagere, CR Simha, Hiremagalur Kannan, Sudha Murthy, H Dundiraj, Pratap Simha and Haldodderi Sudhindra together in a common forum. Which other newspaper has the kind of variety VK’s Editorial page provides?

  9. Rudresh Says:

    Anil kumar,
    Are you a mouthpice of Vishy ? This coloumn issue is Vishy’s strong argument. I did it like that…you are speaking that same voice !
    And,who raised circulation ? Not vishy Bhat. The hard working boys and strayegy ! NUmber of printing centres and localflavour.

  10. Naveen Says:

    What is more paining is no one remebers Ishwara Daitotha !
    He is the person for the roaring succes of VK.

  11. Anil Kumar Says:

    Dear Mr Rudresh,

    I think your statements are out of balance. I do not need to be anyone’s mouthpiece including that of Rudresh. I was just trying to understand the reasons behind the hate-campaign against Mr Vishveshwar Bhat. If you and people of your kind were so much convinced about the ‘misdeeds’ of Vishy, where were you hiding all these days? Why bullshit slinging at this point of time? I guess there’s some hidden agenda which only you might know. Whatever be the reasons, lets be fair to Mr Bhat, Mr Sankeshwar and Vijay Karnataka.

    If people consider Ishwar Daitota and Mahadevappa too contributed more (if not less than Vishy Bhat) let us acknowledge it here openheartedly. With closed minds and vested interests no blog can sustain interest for a long.

    Vijaya Karnataka was once ‘samasta kannadigara hemme’ and let us wish it continues to be ‘hemme’ forever.

  12. Arvind Says:

    If Naveen’s words are to be believed, why Samyukta Karnataka is fading away under Ishwar Daitota’s editorship?

  13. Pruthviraj Says:

    It is a pity with most newspapers of India, rather the news media itself. They do this for their cheap gain. Noone values or cares for the “ethics of journalism”. I do not understand why of all the things they want to spoil the media for their mean interest. Everyone agrees that the country’s main problem is politics, but standing next to it is journalism becasue of these people.

  14. subbz Says:

    Hello,

    Politics / Groupism is common in all the industry and VK is not out of it, I wish VK will remain the NO1 Kannada Newspaper ireespective whether its Sankeswar’s paper or someone else.

  15. nagaraj Says:

    Its bad thinkinking from vs

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