As BW Businessworld completes four decades of its existence this year, pending salaries, delays in vendor payments, court cases, shrinking ad revenues, and an absence of corporate events have pushed the magazine to the brink of collapse. Illustrating the sense of gloom around the business publication, its management recently served defamation notices to a former employee and a couple of Twitter users for sharing a screenshot of a LinkedIn interaction involving Anurag Batra, its chairman and editor-in-chief.
“Some journalists who I owe no dues to have unleashed a malicious campaign against me. They are slanderous and motivated,” Batra told Newslaundry.
He conceded that the last few years have been tough: “I have struggled to raise funds.” The magazine, he said, faced a cash crunch. “I am in the process of raising funds now,” he added. “My plan is to clear all payment dues in 90-100 days.”
The Kapoor family, of Yes Bank fame, which owns over 60 percent of the company, wants to exit, Batra said. “There have been ongoing discussions regarding the possibility of introducing a new investor since the existing investor, for internal reasons, would like to pare their various investments.”
He and Kapoor’s family office jointly own over 99 percent stake in the media company running the magazine.
In 2013, when the ABP Group put BW Businessworld on the block, there were no immediate takers. The Kolkata-based media company, owner of the Telegraph and Anandabazar Patrika, had run up losses and decided to offload the publication and focus on Fortune, a magazine it launched in India in 2010 in a licensed partnership with Time Inc.
Reeling under a global economic crisis, India’s GDP growth had fallen to 5 percent in 2012-13. Most media houses were teetering on the brink of a crisis as sluggish industrial growth and fall in ad revenues hit them hard.
Staring at the prospect of an imminent shutdown, then editor Prosenjit Datta quickly sewed up a business plan. Launched in 1981, BW Businessworld, the only weekly in India, had built a loyal reader base, with a circulation of over 60,000 copies. Just before the sale, the ABP Group had turned it into a fortnightly.
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 skimpy profit or loss margins did not make much difference in a good year, but mattered when the group suffered a loss. Some people at BW had even blamed ABP for meting out stepmotherly treatment to the magazine: the group never treated it as a separate business entity and nor did it have an independent space-selling team.
Datta’s proposal was liked by a few investors, but time was running out.
In early September 2013, the promoter and chief editor Aveek Sarkar invited Datta for lunch. He told him that he had found a buyer for BW in Anurag Batra, a first-generation media entrepreneur, journalist and an eternal optimist rolled into one, as his LinkedIn profile declares. Batra was then known as owner of Exchange4Media, a platform for information on the advertising and marketing industry.
The deal, the contours of which are still under wraps, was pegged at about Rs 8 crore. It had three components – an upfront payment, a monthly fee paid to ABP for handholding BW’s marketing functions, a lease rental to operate from the same place leased by ABP.
The magazine was operating out of two floors of the Express Building on Delhi’s Bahadur Shah Zafar Marg. Barring a fairly large reporting team in Mumbai and reporters in a few other cities, BW’s production, design, desk and photo departments were all based in Delhi, with 50 people working in various editorial departments.
An old friend of Batra, Vikram Jhunjhunwala, who ran a boutique investment banking and asset management firm, Shrine Capital, helped him sew up the deal. Jhunjhunwala was offered about 1 percent stake as sweat equity. Similarly, Amit Kapoor, a faculty of leading business schools who built the Institute for Competitiveness, also received shares in the company.
A statement issued on September 19, 2013 said ABP had sold the magazine to Batra and Jhunjhunwala for an undisclosed amount, giving the impression that Jhunjhunwala, along with Batra, funded the deal. In fact, Batra had raised a loan from a Mumbai-based media magnate 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 top editorial staff, standing in the bay. “I am going to transform the magazine. Will leverage and create a bouquet of products,” he assured them.
There was an air of ebullience in the newsroom.
In just a couple of months, however, the new owner, GBN Media, later rechristened Businessworld Media, was caught in a whirl of a cash crunch. Salaries of staffers, credited by the last day of the month, got delayed by a week, triggering murmurs in the office.
An apologetic Batra offered to make advances to employees faced with EMI payments.
There were efforts to effect a quick turnaround, but they proved futile. So Batra cut manpower to drive down costs.
A former staff member said, “Like many other magazines in those days, Batra introduced the concept of sponsored content to drive revenues”.