BW Businessworld is on the verge of collapse. What didn’t go well?
As BW business world ends four decades of its existence this year, pending salaries, late payments from suppliers, court cases, declining advertising revenue and lack of corporate events have pushed the magazine to the brink of collapse . Illustrating the feeling of gloom surrounding the trade publication, its management recently served libel notices on a former employee and a few Twitter users for sharing a screenshot of a LinkedIn interaction involving Anurag Batra, its chairman and editor-in-chief.
“Some journalists to whom I owe nothing for starting a malicious campaign against me. They are slanderous and motivated, ”said Batra Laundry.
He conceded that the last few years have been difficult: “I have struggled to raise funds. The magazine, he said, was facing a cash crunch. “I am fundraising now,” he added. “My plan is to clear all payments in 90-100 days.”
The Kapoor family, of Yes Bank fame, which owns over 60% of the company, are keen to step down, Batra said. “Discussions are underway regarding the possibility of introducing a new investor since the existing investor, for internal reasons, wishes to reduce his various investments.”
He and the Kapoor family office jointly own over 99% of the shares in the media company that runs the magazine.
In 2013, when the ABP Group put NB Business world on the block, there were no immediate takers. The Kolkata-based media company, owner of Telegraph and Anandabazar Patrika, had accumulated losses and decided to unload the publication and focus on Fortune, a magazine launched in India in 2010 under a licensed partnership with Time Inc.
Under the shock of the global economic crisis, India’s GDP growth fell to 5% in 2012-13. Most media houses were on the brink of crisis as sluggish industrial growth and falling advertising revenues hit them hard.
Contemplating the prospect of an impending closure, editor-in-chief Prosenjit Datta quickly drew up a business plan. Launched in 1981, NB Business world, the only weekly in India, had built up a loyal readership base, with a circulation of over 60,000 copies. Just before the sale, the ABP Group had made it a bimonthly.
Datta’s plan was to leverage the magazine’s reputation and raise around Rs 30 crore from investors to make it profitable. For ABP, the magazine’s low profit or loss margins didn’t make much of a difference in a good year, but did matter when the group suffered a loss. Some people at NB even criticized ABP for inflicting a mother-in-law treatment on the magazine: the group never treated it as a separate business entity, nor did it have an independent space sales team.
Datta’s proposal has been appreciated by a few investors, but time is running out.
In early September 2013, developer and editor Aveek Sarkar invited Datta to lunch. He told her he had found a buyer for NB to Anurag Batra, a first-generation media entrepreneur, journalist and eternal optimist are one, as his LinkedIn profile states. Batra was then known as the owner of Exchange4Media, an information platform on the advertising and marketing industry.
The agreement, the contours of which are still secret, was set at around Rs 8 crore. It consisted of three components: an initial payment, monthly fees paid to ABP for the start-up BW marketing functions, a rental lease to operate from the same location leased by ABP.
The magazine operated on two floors of the Express Building on Bahadur Shah Zafar Marg in Delhi. Unless there is a fairly large reporting team in Mumbai and reporters in a few other cities, BW the production, design, office and photo departments were all based in Delhi, with 50 people working in various editorial departments.
An old friend of Batra’s Vikram Jhunjhunwala, who ran an investment bank and asset management firm, Shrine Capital, helped him close the deal. Jhunjhunwala was offered a stake of around 1% in the form of sweat capital. Likewise, Amit Kapoor, a faculty of top business schools that built the Institute for Competitiveness, also received shares from the company.
A statement released on September 19, 2013 said that ABP sold the magazine to Batra and Jhunjhunwala for an undisclosed amount, giving the impression that Jhunjhunwala, along with Batra, had funded the deal. In fact, Batra had taken out a loan from a Mumbai-based media mogul to close the deal.
The takeover surprised many people in the Mumbai office.
On his first visit to the Mumbai office, Batra spoke briefly to the high-profile editorial staff, standing in the bay. “I’m going to transform the magazine. Leverage and create a bunch of products, ”he assured them.
There was an air of excitement in the newsroom.
In just a few months, however, the new owner, GBN Media, later renamed Businessworld Media, was caught in a whirlwind of money. Employee salaries, credited to the last day of the month, were delayed for a week, triggering murmurs in the office.
An apologizing Batra offered to make advances to employees facing EMI payments.
Efforts were made to effect an early turnaround, but they were unsuccessful. Batra has therefore reduced its workforce to reduce costs.
A former staff member said: “Like many other magazines at the time, Batra introduced the concept of sponsored content generate income ”.