Zee’s new committee to focus on cost cuts, critical verticals

The special committee will review the management’s business performance and provide required directional guidance, Zee said in a statement on Tuesday.

As part of its first set of review sessions, the committee has identified key business verticals that require critical assessment including Zee’s tech subsidiary Margo Networks that offers internet connectivity under the brand name Sugarbox; Zindagi, a general entertainment channel that syndicates content from foreign countries; its recorded theatre service Teleplay; short video app Hipi; online video-on-demand platform Weyyak; and the English TV cluster. 

Besides advising a 50% expenditure cut on the company’s Technology and Innovation Centre (TIC), the committee has also reviewed the music business.

The special committee, led by ZEE chairman R. Gopalan, underscores the board’s commitment towards protecting the interests of all stakeholders, Zee said. Chairman of the audit committee Uttam Prakash Agarwal is also part of the committee.

Business verticals requiring critical assessment which include Margo Networks (Sugarbox), Teleplay and Zindagi, Hipi, Weyyak and English cluster of linear TV business, will need to substantially reduce losses and enhance performance levels, the committee has said. 

Having conducted an analysis of the TIC, which had incurred an expenditure of approximately ₹600 crore in the last year, the committee has highlighted the immediate need for the centre to focus on return on investment and advised that the management should leverage the TIC’s artificial intelligence and machine learning tools to gain a deeper insight into consumer profiles. 

The management should also reduce the expenditure at the TIC by 50%, for financial year 2024-25; and utilize its services to enhance the company’s content development, distribution and monetization approach, the committee has added.

Further, the committee has reviewed the music business of the company; and advised its leadership team to enhance monetization avenues and subsequently increase the vertical’s contribution to the company’s bottomline. 

It has also advised that the music business should focus on further optimizing costs, without losing leadership position in the market.

“After completing a detailed set of 33 meetings with various business verticals, corporate functions and leaders of the management team; our confidence and belief in the potential of the company to deliver targeted results, has certainly strengthened. Under the leadership of Punit Goenka, the businesses are well-aligned and focused towards set goals for the future,” Gopalan said in a statement. 

The committee has provided independent views to the business leaders and the board has also advised the MD and CEO to further simplify the management structure and optimize the utilization of human capital, Gopalan said.

Over the past few weeks, senior executives such as Rahul Johri, president, business, and Nitin Mittal, president and group chief technology officer have quit Zee.

On 22 January, Sony Pictures Entertainment formally terminated its merger agreement with Zee Entertainment after months of debate on the appointment of a chief executive for the merged entity. Punit Goenka said in a recent earnings call that the company is now charting a three-pronged approach – cutting costs, reducing overlaps between businesses, and enhancing quality to regain margins.

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Published: 26 Mar 2024, 04:40 PM IST