Comcast Makes Big India Bet Via Bodhi

Comcast-run NBC Universal received approval from the Competition Commission of India (CCI) late Wednesday to invest in Bodhi Tree, a move that will pave the way for the American multinational, which also owns a majority stake in European satellite broadcaster Sky, a small indirect stake in Viacom18 Media.

“The CCI approves the acquisition of the certain shareholding of BTS Investment and Bodhi Tree Systems VCC (BTS VCC) by NBC Universal Media LLC, a wholly owned subsidiary of Comcast Corp. under Section 31(1) of the Competition Act, 2002," the competition watchdog said in a release.

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The funds from NBC Universal’s investment in Bodhi Tree will be utilized to invest in Viacom18.

Separately, Bodhi Tree will invest ₹4,306 crore in Reliance Industries Ltd-controlled Viacom18 as the first tranche of an overall commitment of ₹13,500 crore. Reliance Industries group entities, meanwhile, will put in an additional ₹10,839 crore.

Out of Bodhi Tree’s ₹4,306 crore, around ₹2,000 crore will come from Qatar Investment Authority, Qatar’s sovereign wealth fund, while the remaining will be invested by Bodhi Tree. An additional ₹1,600 crore will come from Comcast later, one of the people said, requesting anonymity.

“Comcast has done the due diligence of multiple media assets in India and has been looking to enter the Indian market for some time, but none of the deals fructified. This time, they are coming in with Uday Shankar-James Murdoch’s venture, but the amount they are investing as of now is under $200 million," the person said.

Bodhi Tree had initially committed to invest up to ₹13,500 crore in Viacom18, the second person said on condition of anonymity. “Bodhi Tree will continue to raise funds and will invest as and when they close more funding."

Post investment, in equity terms, TV18 will continue to hold 50.994% in Viacom18, while Paramount Global (erstwhile ViacomCBS) will own 48.994%; and Bodhi Tree will get a 0.011% in the company.

Most of the funding will go into Reliance and Bodhi Tree getting Compulsorily Convertible Preference Shares or CCPS in the ratio of 82.2% and 17.8%, respectively. If and when Bodhi Tree manages to raise more funds, it will increase its share in CCPS.

On a fully diluted basis, RIL group entities will own 60.37%, while Reliance-controlled TV18 will own another 13.54% in Viacom18. Both Bodhi Tree and Paramount Global will have 13.08% and 13.01%, respectively.

Reliance and Viacom18 first announced a partnership with Bodhi Tree Systems on 27 April 2022 to form one of the largest TV and digital streaming companies in India. As part of the deal, while Bodhi Tree committed to investing ₹13,500 crore with a consortium of investors, Reliance was to invest ₹1,645 crore. In addition, the JioCinema OTT app was transferred to Viacom18.

The new development will provide Viacom18 cash worth ₹15,415 crore to “innovate and disrupt" the media and entertainment sector, the company said. The company has also appointed Uday Shankar to the Board of Viacom18.

One of the persons said that Comcast’s funds are expected to come in by June, which will allow Bodhi Tree to take its shareholding to 16% in Viacom18. Apart from being US’s largest cable and home internet service provider, Comcast also owns Universal Studios, video streaming service Peacock, Universal theme parks, as well as broadcast and cable channels like CNBC, Telemundo, and MSNBC. In 2018, it acquired a majority stake in Sky after buying Rupert Murdoch’s 39% stake in the European broadcaster.

Bodhi Tree Systems is a platform run by Murdoch’s Lupa Systems and former Walt Disney Co. Asia Pacific president and Star and Disney India chairman Uday Shankar.