Sakaal's plan for national footprint loses steam

It's not the best of times for Abhijit Pawar, the 36-year-old managing director of the Rs 350 crore (Rs 3.5 billion) Sakaal Media Group in Pune. His six-month-old English newspaper "Sakaal Times" is in the news for the wrong reasons. The paper has shut down its Delhi office leaving a little over 60 people jobless.

The Pune edition of the English daily, launched with much fanfare in May 2008, is still being printed but is said to be struggling at around 50,000 copies compared to The Times of India's 220,000. At the time of the launch, Pawar claimed a print run of 125,000 copies.

Pawar, better known as the nephew of Agriculture Minister Sharad Pawar, claims that the circulation has been deliberately restrained. "The circulation was about 55,000 copies. It would be completely unviable to grow it at this stage," he says. Commenting on shutting down the Delhi operations, he says that the company has not done anything unethical or illegal.

"Nobody raises questions when Lehman Brothers goes belly up and Infosys and Tatas lay off people. Businesses have to take a realistic view - I can't be egoistic and pretend that there are no problems," Pawar says. Clearly, Sakaal Times, the Mario Garcia-designed newspaper, will not have editions in Goa, Jaipur, Chandigarh and Delhi as promised. "And I cannot afford to pay such high salaries to people for a single- city paper," admits Pawar.

To be sure, barely six months ago, the dapper MD of the company had an ambitious media plan. He was keen to grow the newspaper business inherited from his father four years ago when he returned from Munich. Confined to Maharashtra, where Sakaal Media sells over a million copies of its Marathi daily Sakal, he had set his sights on a national footprint through the English newspaper. Earlier this year, he also started a quarterly English magazine India & Global Affairs. That's not all. On August 15 he launched a news and entertainment channel under the brand Saam TV.

After Rupert Murdoch's hush-hush meeting with Abhijit Pawar in Pune (in August 2008), the buzz was that Star would pick a 26 per cent stake in Pawar's Marathi channel Saam TV.

However, Star India sources said that there has been no development on that front. Besides Saam TV, though very new, is still at the bottom of the viewership numbers in a market where channels like Zee Marathi, ETV (Marathi) and Star Manjha dominate.

A print media consultant said that Pawar's plans seem to have come a cropper due to several things happening at the same time. For a start, the newsprint prices spiralled by about 50 per cent making his business plan go hay wire.

Two, soon after the launch of the English newspaper and Marathi TV channel, the economy started looking sluggish. "Sluggish is a mild word. In Pune, the print advertising has plummeted by about 30 per cent," says an independent advertising sales expert based in the city. In the process, local radio channels have benefited, he adds. The total print advertising market in Pune is about Rs 275 crore, of which The Times of India takes Rs 100 crore (Rs 1 billion).

Critics argue that Pawar was pretty ambitious and aggressive but he lacked a clear strategy to steer the media business. "He launched too many products and has not been able to consolidate them," says a print media consultant in Delhi. "If the market conditions change and we do well, the same critics will extol my strategies," he counters.

However, there's hope for Sakaal. Star is going ahead with its home shopping channel with Sakaal group as its business partner. "The channel is expected to launch in January and Star would not have continued to partner Sakaal if the group was in a bad shape. The family has many other profitable businesses and the company is financially sound," says a source. "Whatever we decided with Murdoch, is on," says Pawar.