Ever since the $10 billion merger with Sony fell apart, uncertainty has clouded Zee employees. Their apprehensions seem justified. In an interview with ET, Zee Entertainment’s MD and CEO, Punit Goenka, outlined a strategy prioritising profitability. This suggests potential streamlining of operations, possibly including closure of ventures that don’t meet the performance metrics.
“Frugality, optimisation, and sharp focus on quality, besides ensuring every decision is based on return on investment,” ET quoted him regarding the path to achieving an 18-20 percent EBITDA margin, translating to over Rs 2,000 crore of EBITDA on a cash basis that he promised shareholders.
Goenka clearly mentioned that he would ‘chop off anything that doesn’t yield a return on investment’.
“I have shut down more channels than I have launched in the last 20 years since I joined. I firmly believe that it doesn’t generate profit, it doesn’t belong in our portfolio,” he was quoted.
When asked about layoffs, Goenka said, “In our industry of 15–17 percent churn rate is typical so natural attrition may play a role in this process as well. We need human capital to run this business. Optimisation of human capital is what is needed. We’ll be evaluating certain businesses with a final lens determining when and how they will be shut down.”
He also spoke about the merger and mentioned not having any communication with Sony after the termination of the deal. As quoted in the interview, Goenka’s focus is in the future and they are open to dialogue with new financial or strategic investors.
Talking about Zee going to National Company Law Tribunal(NCLT) seeking implementation of the merger scheme, Goenka said that the application they filed simply states the grounds for termination are incorrect. He also said that he is not aware of any application filed by Sony before NCLT for withdrawal of the scheme.
Goenka also spoke about the media reports that claim SEBI unearthing Rs2000 crore worth discrepancies in Zee accounts. “There has been no misappropriation of funds within the company,” he said.