Zee Entertainment should focus on cost cuts: Panel

Zee Entertainment Enterprises should substantially reduce losses in its businesses including its English TV channels and cut costs in the music business, a special committee formed to review the company's performance says.

The Board of ZEE Entertainment has institutionalised a structured monthly management mentorship programme to guide and enable the management team to achieve key performance metrics, including the targeted 20% EBITDA margin, proposed by the MD & CEO.

This step, led by ZEE chairman R. Gopalan, underscores the board's commitment towards delivering higher value to all stakeholders, the media company says.

In order to drive the programme, the board has formed a Special Committee to review the management's business performance and provide the required directional guidance. The Special Committee comprises of ZEE chairman Gopalan and Uttam Prakash Agarwal, chairman of the Audit Committee.

The committee conducted the first set of review sessions with the management to evaluate business vertical plans, enhance the revenue generation approach and optimise resource utilisation for improved efficiencies across the company.

"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 the targeted results, has certainly strengthened," says Gopalan.

"Leveraging the external lens and an outside-in perspective, the Committee has provided its independent, neutral and fresh views to the business leaders enabling them to further improve their efficiency and performance," he adds.

The board has also advised MD & CEO Punit Goenka to further simplify the management structure and optimise the utilisation of the human capital.

The Special Committee has identified business verticals that require a critical assessment. These include Margo Networks (Sugarbox), Teleplay & Zindagi, Hipi, Weyyak and English Cluster of Linear TV Business. It has advised that the identified business verticals will need to substantially reduce losses and enhance their performance levels.

The panel conducted an analysis of the Technology and Innovation Centre (TIC), which had incurred an expenditure of approximately ₹600 crore last year. The Committee noted that the TIC has developed a substantial level of technology and tools; however, it has highlighted the immediate need to focus on Return on Investment. After reviewing the TIC’s approach to gradually emerge as an independent technology company; the Committee has advised that the management should stay focused on content.

The Committee has advised that the management should reduce the expenditure at the TIC by 50%, for the financial year 2024-25. The panel has advised the management to utilise the services of TIC to enhance its content development and distribution process. It has also advised that the management should leverage TIC’s Artificial Intelligence (AI) and Machine Learning (ML) tools to gain a deeper insight into the consumer profiles.

The panel has advised the leadership team of the music business to enhance the monetisation avenues and subsequently increase the vertical's contribution to the company's bottom line.