Saregama Eyes Majority Stake in Karan Johar’s Dharma Productions Amid Industry Shifts

RP Sanjiv Goenka’s music label, Saregama India Ltd, is in discussions to acquire a majority stake in Karan Johar’s Dharma Productions, according to sources familiar with the matter. While talks are ongoing, the deal is not finalized yet and may still fall through, said the insiders.

Dharma’s Challenges

Dharma Productions, known for its Bollywood hits, is facing challenges due to the unpredictable box office, reduced earnings from satellite and digital rights, and rising fees for top stars. This has made it harder for the company to operate independently, prompting it to seek investments from large conglomerates.

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Saregama’s Strategy

Saregama, which recently acquired a majority stake in digital entertainment company Pocket Aces Pictures, aims to expand its movie and content portfolio. The company has been focusing heavily on content but has not made a strong impact in movie or OTT production. Leveraging Dharma’s relationships in the film industry and its ability to secure projects with top stars could help Saregama gain a foothold in the movie business.

Dharma’s Performance

Dharma Productions has struggled with recent films underperforming at the box office, making it harder to sustain on its own. The company’s financial report for FY23 shows a revenue of ₹1,044.16 crore with a profit of ₹10.69 crore. In comparison, Saregama reported a revenue of ₹790.3 crore and a net profit of ₹185.1 crore for the same period. Dharma’s recent releases include Kill, Bad Newz, Yodha, and Mr & Mrs Mahi, with Jigra slated to hit theatres this week.

Saregama’s Growth

Saregama has been actively expanding, acquiring 51.8% of Pocket Aces Pictures for ₹174 crore in an all-cash deal in September 2023. It plans to acquire an additional 41% stake within the next 15 months. The company is also focusing on live shows and concerts to boost monetization of its intellectual properties, while its film production arm, Yoodlee Films, is currently focused on regional cinema, especially in languages like Malayalam, Punjabi, Tamil, and Telugu.

Both Saregama and Dharma have yet to comment on the deal. However, this partnership could signal a shift in how Bollywood production houses are navigating industry challenges, especially in a post-pandemic landscape.