Former CEO’s acquisition of Reliance Entertainment could fructify by April

The acquisition of Anil Ambani’s Reliance Entertainment by its former chief executive officer Shibasish Sarkar through his new venture International Media Acquisition Corp. is likely to be finalized by March or April, said three people aware of the developments. The move will help the debt-ridden parent company exit the movie business, with capital in exchange for IPs (intellectual properties) while also spelling good news for future projects, they said.

Reliance, which already has a bunch of popular film franchises such as Golmaal and the cop universe including Singham, Simmba and Sooryavanshi, and dabbles in gaming and animation as well, could benefit from overseas distribution and investors, they added.

“The timing is absolutely right given that Indian content is being lapped up by global audiences and media consumption is at an all-time high since the pandemic,” film producer, trade and exhibition expert Girish Johar said. There is already positive sentiment in overseas territories for Reliance projects with Akshay Kumar-starrer Sooryavanshi having benefited from exhaustive promotions and a wide release across 1,300 screens abroad resulting in box office earnings of $6.58 million ( ₹49.01 crore) at last count. A media analyst who did not wish to be named said finding organized capital has always been a challenge for Bollywood and a move like this should certainly enhance the confidence of foreign investors towards the Indian film industry.

“Most film studios in India now are global companies, be it Disney, Sony or Viacom18 so Reliance could benefit from a similar arrangement and expertise,” Atul Mohan, editor of trade magazine Complete Cinema said, pointing out that the Zee-Sony merger, if it materializes, could further strengthen the trend.

Sarkar did not respond to Mint’s queries on developments towards the acquisition of Reliance Entertainment.

To be sure, Ambani’s parent company had been wanting to exit the film business for some time now. Yusuf Shaikh, business head, feature films at production and distribution company Percept Pictures said it is clear they were up for liquidation. In 2014, Ambani had merged a part of Reliance Mediaworks, his media company with Prime Focus, which provides creative and technical services to the film, broadcast and advertising market. As part of the transaction, the India and overseas operations of RMW’s film and media services business were combined with Prime Focus through a slump sale. The same year, Ambani had sold his BIG Cinemas unit to the Carnival Group.

“It was more a vanity project for them than an economic decision given that they never really managed the kind of scale and wide portfolio it takes to sustain the business. You can’t just make three to five tent-pole films a year. You need a wider library. Now one also needs an OTT vertical that keeps the business churning on an annual basis,” the person mentioned above said. However, he added that Sarkar would need to expand the new company’s offerings to make more movies and OTT series for a risk managed strategy and find strong international partners.

While there is no clarity yet on the latter, in an earlier interview with Mint, Sarkar had said the company’s streaming, television and animation content account for 40% of its business as of now, compared with 5% two years ago when film ventures were its mainstay and that it is diversifying interests to cater to new media audiences. On the digital front, there is a Netflix film starring Sonakshi Sinha, and shows across Netflix, Amazon and Disney+ Hotstar. Meanwhile, the firm that has just released action drama Sooryavanshi, has scheduled sports drama ’83 for December and has feature film projects with Ranveer Singh and Ajay Devgn lined up, among others. Live Mint