Media Capital – A Tactical Approach

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Media Capital – The Concept

„ A barter Transaction
„ Two parties: one Corporate House and another is Media Company
„ Corporate House gets credit limit for advertising in the different channels of media like
newspapers, magazines etc.
„ Media Company gets stake in Corporate House to the extent of credit limit given by media
company after valuating Corporate House from certified valuer.
„ Corporate House and media company negotiates on price of share.
„ Experience Expansion vis-à-vis Growth
„ Advertising and promotion through media channels facilitates Topline growth.
„ Trading on Equity saves cash and increases working capital of Corporate House.
„ Increased working capital can be utilized for further expansion of activities.
„ Win-win situation for both the parties
„ Corporate House get media support for advertising products to increase Topline at the same
time without spending liquidity
„ Media Company get new client relationship and stake to the extent of credit limit offered.

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Media Capital or Cash ? – Choosing best option……

Say, Co A want to invest 3 Cr. in advertising and promotion expenses in coming 3 years in the ration of 1:1:1

By Paying Cash Media Capital

Rs in Rs in
1st 2 nd 3 rd 1st 2 nd 3 rd
lakhs Total lakhs 12% Total
Year Year Year Year Year Year
12 % ROI ROI
Expenses 100 100 100 300 Expenses 100 100 100 300
Cash Cash
100 100 100 300 100 100 100 300
Outflow Savings
Interest Interest
12 25.44 40.49 77.93 12 25.44 40.49 77.93
Forgone Earned

Value Added Benefits

• Cash-less transaction
• Income Tax saving upto 33% of actual advertisement credit utilized
• Wider customer reach across the nation due to increased advertisement
• Media planning support to result into improved brand equity
• Induction of reputed organization like Times Group as a stakeholder in the Company helps to attract other investor groups including VC / PE funds
• Times Group has wide portfolio of investments and hence, cross-referencing among investee companies can result into additional business
• Valuation offered by Times serves as a benchmark while diluting stake in future
• Better public and investor relations

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Process

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About Bennett & Coleman

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Bennett & Coleman – Leading all the way!!

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Audience Profile – News Papers

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Audience Profile – Magazines

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Sample Investments by Times Group

Source: Times Group www.fusionadvisors.in

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Sample Investments by Times Group

Source: Times Group www.fusionadvisors.in

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Industry Speak…………

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Happy Knowledge Sharing!

Thank You!

Amar Kakaria

amar@fusionadvisors.in

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