THE FAILED ENTREPRENEUR

It has been three years since this executive left Modis company but he still fears his aggressive streak. He doesnt appreciate slight, he says.

Going by his trail of business ventures,its clear that sports and entertainment were his pet sectors. After his forced exit from the US,where he was embroiled in a drugs case,Modi got into father KK Modis business.

Modi Senior runs a 2 billion enterprise spread across textiles,tyres and tubes,chemicals and consumer goods,among others. But these businesses couldnt hold young Lalits interest and soon,he set out on his own.

It was the early nineties and the cable and satellite broadcast business was gradually taking roots in the country. Global broadcasters,even in the non-news sector,werent allowed a free entry. Also,they werent familiar with the local market and therefore,they preferred a local partner for initial hand-holding. Modi was quick to seize the opportunity and thus,Modi Entertainment Network MEN was born.

In 1993,MEN signed an ambitious joint venture with the US-based media conglomerate Walt Disney. WD India Pvt Ltd,the new company in which Walt Disney had 51 per cent stake and MEN held the rest,was given the mandate to introduce Disneys merchandise in the Indian market and to augment its programming on various existing television channels.

It was a 10-year deal that for a large part of it remained successful. The two companies built a business of around Rs 30-40 crore in due course, says a former executive of the company.

In 1995,Walt Disney also entrusted MEN with the responsibility of distributing its popular sports channel ESPN. In his various media interviews,Modi has claimed that he encouraged ESPN to bet on cricket and buy the broadcast rights of popular cricket events. Modi has always had an eye for lucrative opportunities. ESPN was one of the first channels in the country to go paid. He managed to convince ESPN that with cricket in their pocket,people will readily pay a fee to see the channel, says a top executive of a public relations company involved in the deal. ESPN was soon one of the leading sports channels in the country.

Soon,MEN signed similar deals with Paris-based FTV,Dubai-based sports channel Ten Sports and DD Sports.

Broadcast distribution,marketing and advertising sales is a rewarding business,bringing in anywhere between 20 and 40 per cent of the revenue raised without any major investment,say industry insiders.

According to some former employees,by 2001-2,MENs revenues went up to around

Rs 60-70 crore. But soon,signs of trouble emerged. Almost every partner had some problem or the other with MEN. The primary grouse was that they were not being adequately compensated in the businesses, says a former senior executive.

Every business partnership that MEN entered into during this period ended in the courts. ESPN,in which Rupert Murdochs News Corp picked up a 50 per cent stake later,decided to part ways with MEN five years after its contract ended. ESPN even dragged MEN to courts for allegedly not paying them their dues. The case with ESPN reached the US,where the court asked MEN to pay ESPN 2.4 million. ESPN refused to comment on the episode. It is not clear if MEN eventually paid the dues to the broadcaster.

The deal with Walt Disney also ended on a sour note. Not happy with their progress in India,they decided to enter India on their own but MEN challenged the move and the case finally went into arbitration. According to former employees,Walt Disney had to pay MEN a compensation of around Rs 30-40 crore to get off.

A similar case for non-payment of dues filed by DD Sports is still in the courts. According to DD lawyers,the case went into arbitration and finally,MEN was directed to pay the broadcaster Rs 40 crore but the company is dithering on it.

Modi did not respond to a detailed questionnaire sent to him on his various business interests and allegations.

Besides the broadcast business,Modi dabbled in lottery and direct-marketing businesses as well but these too didnt take off.

By 2004,MEN was floundering. Employees in various offices,including Delhi,wouldnt get their salaries for months on end. Most offices,except for the one in Mumbai,shut down eventually, recalls someone who worked with MEN for around five years. Modi made another attempt,his last,at making a success of his broadcast business. In 2007,he came up with the idea of launching the countrys first local travel-and-living channel,Voyages.

He is a man with great ideas but execution has always been his weakness…, says a person working with Modi. IPL is the only exception,but it could also be because of crickets popularity in the country and the fact that the Board of Cricket for Control in India has no competitor in the market.

According to several people involved with Voyages,the channel was launched as a joint venture with a foreign company. The channel never took off. But by then,Modi,after his stint as Rajasthan Cricket Association president,had got deeply involved with cricket and was enjoying the limelight.

Voyages was recently in the news,with reports that funds from some IPL deals were routed to the channel. The channel was probably set up to park unaccounted funds, says a senior industry professional.

But the failed dealings are a thing of the past and Modi is now known to lead an extravagant life. He has a sea-facing bungalow in one of Mumbais posh localities. His love for luxury cars is well-known. But he has repeatedly maintained that his opulent lifestyle has little to do with cricket.