Haim Saban Eyes Opportunities In Asia

India and Southeast Asia in the spotlight
29 May 2014 - (Media Business Asia)

Haim Saban, chairman and CEO of private equity company Saban Capital Group, is poised to push further into Asia, with a particular focus on India and Southeast Asia.

The group’s Asian portfolio comprises stakes in Indonesia’s largest broadcaster and pay-TV platform, MNC Group and MNC Sky Vision respectively, as well as Celestial Tiger Entertainment, a regional pay-TV network, and Taomee, a Chinese portal catering to children.

“The main reason I came to Asia on this trip is because we are very motivated to invest in Southeast Asia and India,” Saban said, speaking at the Asia Pacific Pay-TV Operators Summit (APOS), convened by Media Business Asia publisher Media Partners Asia.

“We are looking at multiple opportunities,” the veteran dealmaker added, anticipating that announcements would be forthcoming while declining to provide details. “We are very fortunate to have quite a bit of dry powder,” he explained.

With offices in Los Angeles and Singapore, Saban Capital Group specializes in the media, entertainment and communications industries. “We are opportunistic investors in the media and telecommunications business,” Saban said. “That includes everything from broadband to pay-TV to free TV, ecommerce, mobile and over-the-top.”

Investments in Indonesia in particular have yielded strong returns, with minority stakes in MNC Group, run by Hary Tanoesoedibjo, as well as in the IPO of MNC Sky Vision, run by Rudy Tanoesoedibjo, capitalizing on the country’s macroeconomic growth.

“We are basically backing Hary and Rudy,” Saban said. “Wherever they go, we go with them. They know this market a lot better than we ever will. We are very bullish on Indonesia, but we are following their lead.”

DISTRIBUTION DISRUPTION
In the US, Saban Capital Group’s principal investment is Univision, a major Spanish-language media company acquired by an investor group, led by Saban, in 2006. Haim Saban is chairman, with strategic input on matters affecting the broader market.

An upcoming auction of wireless spectrum in 2015, for example, interests him as a means to expand Univision’s reach beyond pay and free TV.

“It’s hard to say today whether we are going to participate,” he said. “There is a huge opportunity to allow broadcasters to show content that we buy for a lot of money on all platforms, anywhere. If we succeed in that, then the sky is the limit for what a company like Univision can achieve.”

One potential benefit of additional spectrum may be an improved negotiating position, as Univision’s distributors look set for consolidation.

Citing the proposed Comcast-Time Warner deal, Saban expressed concern about the prospect of a pay-TV entity servicing 30 million US homes.

“We are in the middle of discussions with them but this could be very problematic,” he said. Nonetheless, Saban remains optimistic that a solution can be attained. “We have had a great relationship with Comcast, working with them in the last seven years, and we hope to find common ground.”

The same could not be said for potential market disruptor Aereo. The service, which rents receivers that access free TV signals, has been brought before the Supreme Court after lower courts disagreed on the legality of its business model.

At stake are retransmission fees that have become an integral part of revenue for US free-to-air networks like Univision.

“Aereo is a very simple concept: it is a business that has no cost of goods,” Saban said.

“They give you an antenna, you pay them eight dollars, they take our goods and they give it to you, but they don’t give us any piece of the eight dollars. We are not going to stand for it, and the Supreme Court is going to decide on that.”

Saban sees himself as an operator as well as an investor, having built successful media businesses in Europe and the US before founding Saban Capital Group in 2001.

“We are not a fund,” he said, “but we act like a fund that brings added value, because in our DNA we are more operators than investors.”

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