Reela advantage: Capturing eyeballs at a multiplex in Delhi

At PVR's Priya cinema complex in Delhi's Tony Vasant Vihar, the evening show on weekends is usually a sellout affair irrespective of the quality of the movie. And those who make the numbers at multiplexes aren't exactly mall rats and window shopper types. That, for advertisers and marketers makes for a good target audience. So, whenever you plan to go out for a movie, chances are someone will try to sell you a holiday package to Goa or a car, even a credit card. The footfalls at PVR's five multiplexes in Delhi alone were close to 40 lakh in 2002-2003. "At a multiplex, the quality of sight and sound is far superior and it presents an opportunity for reaching out to a focussed group," says Tushar Dhingra, Vice President (Marketing), PVR Cinemas.

And add to it the fact that the viewer is not armed with a remote or disturbed by the mobile phone. A Lakme can choose to be associated with Pretty Woman, or Maggi can advertise when Jungle Book gets screened, says Dhingra.

"They provide us with a captive audience with very high spending powers," explains Soumitra Bhattacharyya, President, Madison Outdoor Media Services. "And once they enter the lobby of a multiplex there are plenty of ways like direct and interactive marketing and signages to reach out to them."

But all may not be picture perfect with the multiplex story. According to Anita Nayyar, Executive Director (North), Starcom, the multiplex culture is very localised and largely limited to Delhi and Mumbai. "Only when the number of footfalls in these swanky multiplexes reaches the threshold level can in-theatre promotions and advertising take off," she says. Hold the popcorn.

-T.R. Vivek

PEEVES
What Companies Hate In The New Companies Bill

The Companies Amendment Bill, 2003 is yet to be passed by Parliament, but here are five things about it companies already hate.

All company investments have to be routed through a single subsidiary. There goes promoters' dreams of building multiple companies.

Boards will have to have a majority of independent directors, including women. Where are they going to find them?

Dividend payouts cannot exceed 90 per cent of the total profits. How will large subsidiaries pay back their holding companies now?

Subsidiaries will need to furnish separate balance sheets. Simply an issue of more paper work.

Companies have to list depreciation and losses for previous years before issuing dividends.

Start-ups and infrastructure companies may have to wait a while to reward shareholders.

-Ashish Gupta

OBITUARY
Mark McCormack

Mark McCormack 1931-2003

America boasts a galaxy of writers that could make the management of businesses appear as easy as frying an egg. Mark H. McCormack, founder of International Management Group (IMG), the most successful sports promotion firm, who died in New York last fortnight at 72 (his column in this issue was closed a week earlier) was a pioneer of the genre. His most remembered title, What They Don't Teach You at Harvard Business School became an international best seller in the 1980s. The book, which combined management principles with folksy street knowledge, was recommended, in later years, by the students of Harvard Business School to its staff and drew the attention of such unlikely readers as the late Deng Xiaoping of China.

McCormack was not alone in popularising management, but he held a unique position as the author of a personal success story, being the undisputed czar of sports marketing. A promising college golfer and Yale law graduate practicing in Cleveland, he was the first to realise that sportsmen could greatly multiply their income from endorsements and sponsorships. In 1960, he started off by becoming the agent of Arnold Palmer, a golfer, through a simple handshake. Soon after he signed South African Gary Player and American professional Jack Nicklaus. The Big Three dominated golf for decades, and, when there was Tiger Woods, the new star, teeing off, McCormack's IMG bagged him too. In 1968, McCormack moved on to tennis, signing Australian maestro Rod Laver, and adding to the list with Bjorn Borg, John McEnroe, Chris Evert, Martina Navratilova, Andre Agassi and Pete Sampras. He also married tennis pro Betsy Nagelsen. IMG's broadcast division, Trans World International (TWI), set up in the 1960s, is the world's largest distributor of telecast rights. Last year, when asked if he was contemplating retirement, McCormack said "people retire to do what I do everyday-play tennis with Monica Seles or golf with Arnold Palmer". In his life, as in his books, he allowed little distinction between business and pleasure.

-Moinak Mitra

A Deal That Wasn't
The latest on the GTL-Redington deal

GTL's CEO Manoj Tirodkar: Was he in a hurry to close?

For a large section of market analysts, it was a deal with little upside. When, in the last week of February, GTL (formerly Global Tele-Systems) announced that it was buying the Singapore-based it distribution company, Redington, for $95 million (Rs 450 crore), punters didn't take too kindly to the announcement. The question on most lips was: Where's the synergy between a 2.5-3 per cent margin distribution firm and an IT services outfit?

Three-and-a-half months after expressing its acquisitive intent, last fortnight, in a peculiar about-face GTL and Redington jointly called off the deal. Reason: "Redington could not guarantee that its 13-14 relationships with its vendors (Cisco, IBM, Intel, Microsoft and the like) would be of a longer-term nature, say three to five years. That was the most important trigger for the deal, for we were hoping to bag BPO orders from the vendors. Redington on its own had little to offer," points out L.Y. Desai, Chief Investor Relations Officer, GTL.

Fair enough, but why did it take GTL over 100 days to realise that Redington's relationships weren't long-term enough? And why did GTL announce the deal in the first place before doing adequate due diligence of the target? The GTL brass maintains that by the time the first phase of due diligence was completed by mid-March, they were still examining whether the vendor-relationships had long-term potential. Desai adds that since this was a first-of-its-kind deal-an it services firm attempting to acquire a distribution outfit five to six times its revenues-it wasn't possible to make a quick call. That's why not a dollar was made as payment to Redington. Fortunately, investors didn't get taken in by the GTL's M&A hype. In fact, the stock price went up once the merger was called off.

-Brian Carvalho