I&B minister scrapped a programming deal Balaji Telefilms was on the verge of violating and being penalised for. She denies wrongdoing, says she protected Doordarshan.
New Delhi: An order by Information and Broadcasting Minister Smriti Irani to stop TV shows commissioned by Doordarshan has landed the public broadcaster in a legal soup. Not only has it suffered a potential revenue loss of more than Rs 60 crore over three years, the legal tangle could also force it cough up compensation, documents accessed by ThePrint show.
But more significantly, the controversy has raised serious questions of conflict of interest, as the minister’s order is seen to have helped Balaji Telefilms – the well-known television production company owned by Ekta Kapoor, a friend of Irani – and impinged on the autonomy of the public broadcaster.
The I&B minister has denied any wrongdoing. She told ThePrint that she had actually protected Doordarshan and prevented the public broadcaster from suffering huge losses.
A former television actor, Irani became a household name with her role in Balaji’s superhit series Kyunki Saas Bhi Kabhi Bahu Thi, which was aired between 2000 and 2008.
Irani’s intervention meant Balaji escaped paying hefty penalties for delaying on its contractual commitments to produce and market TV shows for Doordarshan and share advertising revenue with the public broadcaster, a nearly two-month-long investigation by ThePrint reveals.
Under its deal with Doordarshan, Balaji would have had to pay a total penalty of approximately Rs. 1.05 crore if it failed to deliver the shows agreed upon for a period of six weeks. Failure to deliver the shows even six weeks after the agreed launch date would have resulted in Balaji also losing its bank guarantee of Rs 87.5 lakh, as well as the telecast slots allotted to it.
Irani’s decision is seen to have hurt others though.
One of them is Saaibaba Telefilms, another Mumbai-based TV production house, which had also bid successfully for Doordarshan slots like Balaji. However, unlike Balaji, it was ready with the shows it had agreed to produce and market under the contract. But the effort – and investment – went to waste as the deal was scrapped by Irani.
Saaibaba has claimed that it has suffered a potential revenue loss of more than Rs 26 crore, served a legal notice to Doordarshan, and sought arbitration to settle the dispute.
The other party seen to have suffered because of the minister’s decision is, ironically, Doordarshan. Not only was the new programming expected to boost the TRPs or television rating points of DD National, the prime entertainment channel of Doordarshan which faces stiff competition from private channels, it was also expected to earn more than Rs 60 crore over three years and shore up the falling revenues of Doordarshan.
Instead, the 7 pm to 11 pm slots sold to Balaji and Saaibaba are since being used to show reruns of old programmes and Hindi films.
Irani has, however, denied any wrongdoing. Responding to questions from ThePrint, she said the policy under which prime slots had been given to Balaji and Saaibaba was flawed, and would have resulted in Doordarshan suffering a loss of Rs 383.25 crore over a three-year period. The loss, she said, could have even risen to as much as Rs 630 crore under different scenarios.
Irani also said questions and insinuation that her decision had impinged on the autonomy of Prasar Bharati were inaccurate as the public broadcaster itself was now reviewing the policy under which prime slots were given to Balaji and Saaibaba.
But the minister did not respond to the question on conflict of interest involving Balaji.
Balaji Telefilms didn’t reply to a detailed questionnaire emailed to group chief operating officer Nachiket Pantvaidya and group chief financial officer Sanjay Dwivedi. Doordarshan Director-General Supriya Sahu said queries addressed to her should be directed to the CEO of Prasar Bharati, Shashi Shekhar Vempati. Vempati did not respond to the queries.
Shows pulled four hours before air time
The case dates back to July 2017, when some new prime time shows, which were due to be broadcast on DD’s National channel, were abruptly put on hold hours before they were scheduled to be aired, following an email from the I&B ministry.
But just a day before this email was sent, Balaji had sought an extension of the deadline for telecast. Balaji said it was not prepared to launch the programmes yet.
It was the third time Balaji was making such a request for more time to produce the shows it had committed to under the deal with DD.
The programmes were to be launched under DD’s ambitious New Content Acquisition Scheme, earlier known as the slot sale policy. Under the scheme, DD’s prime time slots were auctioned to private production houses to invite fresh and competitive content for the ailing public broadcaster.
Balaji and Saaibaba Telefilms were successful with their bids, and won slots in the auction held in 2016.
But then, a confidential email written by I&B ministry additional secretary Jayashree Mukherjee to Prasar Bharati CEO Shashi Shekhar Vempati on 29 July stopped the launch of the new programmes at the last minute.
The email said the issue was discussed in a meeting held by Irani earlier that day, hours before the first show of Saaibaba Telefilms was scheduled for telecast. Mukherjee, DD director-general Supriya Sahu, as well as representatives from the two production companies were present at the meeting.
“HMIB (Hon’ble Minister of Information & Broadcasting) wanted to know as to why a seemingly loss-making proposition for DD had been adopted in respect of the prime time slot sale of DD National,” the email said.
The email said that there was a strong suspicion that the decision to sell prime time slots to private parties would hurt the finances of DD. It said the decision could border on illegality, and there could be a huge potential loss to DD/Prasar Bharati if the telecast was launched on time.
Seeking an inquiry, the email stated that it appeared necessary to ascertain the stakeholders or parties at whom the “finger of suspicion” may point.
The email also said the government advises keeping the “operation of the agreement with the successful bidders in abeyance for the time being”, till the preliminary inquiry is concluded.
Strangely, in the same email, Mukherjee wrote that Sahu had explained in the meeting, with the help of a document, that the new policy would actually be beneficial to DD. But the point was not explained or elaborated.
Result: Suspension of fresh programming that DD had hoped would improve its TRPs and boost revenues.
Estimates based purely on the bidding price shows that had the new programming gone through, DD National could have earned revenues of Rs 19.88 crore in the first year, Rs 20.87 crore in the second year and Rs 22.6 crore in the third year.
But DD was not the only one to lose out. Saaibaba Telefilms also suffered as it was prepared to launch its show Suron Ka Eklavya on 29 and 30 July between 8 pm and 9 pm.
Saaibaba’s legal notice, dated 6 February 2018, said that the production house incurred a revenue loss of Rs 8.06 crore on its show MBA Sarpanch and Rs 18.20 crore on the show Suron ka Eklavya. The notice also said that the dispute will now be resolved only by arbitration.
In an email written to Vempati, Vishal Jain of Saaibaba said the “sudden event” shocked the production house as it had caused a lot of “irrevocable damages and loss of reputation” earned by it over the years.
“We are at a loss to understand what had led to the non-telecast of the show Suron ka Eklavya… pursuant to last communication between us,” the email said.
Referring to the 29 July meeting when the slot sale was put on hold, the email said: “We were shocked that Shri Shashi S. Vempati, Chief Executive Officer, Prasar Bharati was not present in the meeting and we were equally surprised that the meeting was actually kept with Ministry of I&B Smt. Smriti Zubin Irani and it was not even informed to us that the said meeting is schedule with Ministry of I&B (sic).”
Jain’s email said that the meeting took place between 3 pm and 4 pm with Irani, in the presence of I&B secretary N.K. Sinha and other DD officials and representatives of Balaji Telefilms. And four hours before telecast, Saaibaba Telefilms was informed that the telecast would be suspended.
Calling the decision “uncalled, unwarranted and damaging in nature”, the email said Saaibaba Telefilms had incurred a substantial amount of expenditure for the producing the show, including marketing and promoting it through various media.
Slot sale scheme – game-changer or ‘illegal’?
The New Content Acquisition Scheme came into being at the end of a series of Prasar Bharati board meetings held between November 2015 and December 2016. The scheme aimed to lift the sagging TRPs of Doordarshan and also boost revenues which had fallen to Rs 1,124.43 crore in 2014-15 from Rs 1,298.16 crore in 2012-13.
Before this scheme came into existence, DD would pay producers first and then recover costs through advertising revenue. However, minutes of Prasar Bharati board meetings show that DD’s payments to private producers were far exceeding its revenues, and the problem was further intensified by a lack of funding from the I&B ministry.
In May 2016, the first Request for Proposal was approved for selling slots. Seven production companies came forward to participate in the auctions of DD’s 11 prime time slots. However, their applications were rejected for apparently minor reasons, such as non-submission of incorporation certificates.
In July 2016, the board decided to notify a fresh slot sale RFP and relax some norms to attract a larger number of production houses. In October that year, it was decided to float a new RFP under the name “New Content Acquisition Scheme” with some additional concessions.
The fresh bids were opened on 12 December 2016. Saaibaba Telefilms, owned by Gajendra Singh of Sa Re Ga Ma fame, and Balaji Telefilms managed to bag DD’s prime time slots.
Since the decisions were taken by the Prasar Bharati board with no intervention from the I&B ministry, the move by the ministry to step in and stop the shows commissioned by Doordarshan is being seen as a clear violation of the autonomy enjoyed by the public broadcaster.
The Balaji saga
After bagging prime time slots in December 2016, Balaji submitted five concepts in the same month for the shows to be produced for DD, including Meera ka Shyam, Ek Bandhan Aisa Bhi, Humse Hain Saara Jahan and Bol.
Balaji and DD officials met several times in January 2017, and April 2017 was set as a tentative target to launch the programmes. However, this launch date was pushed to 29 May 2017.
Days after Balaji was given the schedules and the launch date, the production house requested postponing the telecast date by a month to 29 June 2017. It also requested withdrawal of the shows Bol and Humse Hai Sara Jahaan, and asked DD to consider replacing them with two other shows – Shiva and Tere Dar Pe Sanam.
While DD initially said it could not defer the launch dates, Balaji insisted DD should consider its new proposed programmes and postpone the telecast date by another month and a half to 15 August 2017.
DD finally relented and, in the last week of May, wrote to Balaji revising the launch dates for its three shows to 14, 27, and 30 June. It, however, refused Balaji’s demand to consider new scripts.
Balaji, however, remained adamant. The production house once again sent an email to DD seeking reconsideration of the new scripts and rescheduling the launch of the programmes to 15 August — effectively a delay of around three and a half months from the first-decided launch date of 29 May.
On 1 June, Balaji CEO Sameer Nair and his team had a meeting with DD director-general Sahu.
At the end of June, Balaji Telefilms sent a revised schedule for launching the shows — it said it was willing to launch two programmes — Dhadkane and Meera ke Shyam — by 31 July, and Ek Bandhan Aisa Bhi by 15 August. Only the third of these concepts was approved by DD earlier.
DD relented, and in an email sent to Balaji on 21 July 2017, it approved all three of these concepts and the launch dates recommended by the production house.
However, this email issued a last warning to Balaji. Referring to the multiple postponements and concept changes, the email stated: “In the interest of launch of the programmes, you are given one last chance to commence the airing of your programmes as per the dates given below. Please note that no further extension shall be given under any circumstances.”
The email also spelt out clause 10 of the contract agreement, which stated that the failure to send the programme by the agreed-upon telecast date of 31 July would attract 25 per cent of the slot fee as penalty for the first two weeks, and then 100 per cent of the slot fee thereafter. In case of failure to come on air even after six weeks, the production house would be liable for encashment of the bank guarantee and forfeiture of the allotment.
On 28 July, three days before the final launch of Dhadkane and Meera Ka Shyam, Balaji again wrote to DD, citing problems with the free commercial time (FCT) and the entire policy on slot sale. FCT refers to the amount of time that can be used to air commercials in a particular slot. In the deal between Balaji and DD, the two were supposed to share revenues from FCT. Balaji’s mail also proposed that DD should rethink and modify the policy before the programmes could start.
In an email, Balaji’s group chief financial officer Sanjay Dwivedi wrote: “We humbly request you to rethink on this policy and modify it for betterment of all content production houses wanting to partner with you in this re-launch phase.”
Indirectly expressing Balaji’s inability to start telecast of the programmes on 31 July, Dwivedi sought a meeting to discuss certain pending points and launch a robust marketing plan two weeks before the show was launched. He wrote that the launch date of the three TV programmes could be mutually decided after the meeting.
The meeting chaired by Irani was held a day after Dwivedi’s mail, on 29 July, followed by the email to the Prasar Bharati CEO.
Responding to questions from ThePrint, Irani said in an email reply that the “contentious” slot sale policy of DD came to the notice of her ministry in July 2017.
She said that on examining the policy, it had emerged that it “was seemingly not only flawed but loss making” and also had “legal implications” in view of the orders of the Delhi High Court.
The reference was to an instance when some producers who had provided programmes to DD went to the Delhi High Court in May 2016, complaining that the slot-sale policy was discriminatory and was against the interest of smaller producers. The court had asked the public broadcaster to communicate to the producers reasons for refusing to appraise their products while also assuring that the decision was not arbitrary.
It was after this order that Prasar Bharati relaxed its slot sale policy norms.
Irani also said that if the slot sale policy were to go through, DD would have incurred a “presumptive loss” of revenue of nearly Rs 7 lakh per episode and for a three-year period for five slots, the presumptive loss would have been Rs 383.25 crore.
“This information and other facts suggested that the proposal prima-facie was a loss making one and prejudicial to the commercial interests of DD,” she said.
“It was also felt that it was constitutional obligation that once something with revenue loss and/or flawed from inception had come to the knowledge of the ministry, it would not have been prudent for the ministry to side with the tide and let it pass as it is, without its concerns being known to PB,” she said, referring to Prasar Bharati.
“There was a request to PB to thoroughly re-examine the proposal,” she said, adding that satisfactory clarifications from DD and PB are still not forthcoming in this regard.
Irani said it was the duty of the ministry/officials to alert Prasar Bharati from falling into a potentially catastrophic situation wherein a loss ranging from Rs 250 crore to Rs 630 crore based on three distinct scenarios was apprehended. Her response, however, did not give details of the scenarios or how they were arrived at.
“The stoppage of the telecast did not allow any money to be given to either Sai films (sic) or to Balaji. In fact it took away the business opportunity that they were going to enjoy at the cost of DD due to DD’s faulty policy approved by the PB Board,” she said.
She also said that questions on the decision impinging on the autonomy of PB were inaccurate since a Prasar Bharati board meeting held on 15 February “considered” a resolution where “the New Content Acquisition Scheme (also known as slot sale policy) may be closed and a Fresh Scheme for Content procurement drawing on the best practices followed by public broadcasters around the globe be framed”.
“Clearly the Prasar Bharati board, exercising its autonomy, felt the need to review it.”