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TV18 offers 20% stake in CNBC at $4.50 m

Our Bureau

MUMBAI, June 20

TELEVISION Eighteen (TV18) has given Sony Entertainment Television (SET) an option to pick up 20 per cent of its stake in CNBC India at a maximum price of $4.5 millions (Rs. 20 crores) on or before October 31, 2000.

TV18 and SET today also announced the signing of an agreement where SET has agreed to act as the advertising sales representative of TV18 for its share of the advertising inventory on the CNBC India business news channel as well as the distribution repre sentative for CNBC India.

Under the arrangement, SET has committed to minimum advertising and subscription revenues for CNBC India. This minimum commitment is also supplemented with a performance-driven commission structure -- which is expected to accelerate revenue growth over and above the minimum guarantee.

In a press release issued on Tuesday, TV18 said ``the cap of the option price considers the contribution of SET in creating enhanced value for the channel through its marketing and distribution efforts and by providing minimum revenue commitment for adve rtising and subscription receipts. The divestment price is, therefore, not reflective of the stand-alone valuation of CNBC India.''

The release mentions that ``this alliance has created a win-win situation for both TV18 and SET. TV18 benefits by allowing it to increase its focus on producing quality Indian programming for CNBC India. SET does not intend to develop business news progr amming capabilities internally and will market advertising and subscriptions for CNBC India as a part of its own bouquet of channels.''