BW Businessworld is on the brink of collapse. What went wrong?

As BW Businessworld completes four decades of its existence this year, pending salaries, delays in vendor payments, court cases, shrinking ad revenues, and an absence of corporate events have pushed the magazine to the brink of collapse. Illustrating the sense of gloom around the business publication, its management recently served defamation notices to a former employee and a couple of Twitter users for sharing a screenshot of a LinkedIn interaction involving Anurag Batra, its chairman and editor-in-chief.

“Some journalists who I owe no dues to have unleashed a malicious campaign against me. They are slanderous and motivated,” Batra told Newslaundry.

He conceded that the last few years have been tough: “I have struggled to raise funds.” The magazine, he said, faced a cash crunch. “I am in the process of raising funds now,” he added. “My plan is to clear all payment dues in 90-100 days.”

The Kapoor family, of Yes Bank fame, which owns over 60 percent of the company, wants to exit, Batra said. “There have been ongoing discussions regarding the possibility of introducing a new investor since the existing investor, for internal reasons, would like to pare their various investments.”

He and Kapoor’s family office jointly own over 99 percent stake in the media company running the magazine.

The takeover

In 2013, when the ABP Group put BW Businessworld on the block, there were no immediate takers. The Kolkata-based media company, owner of the Telegraph and Anandabazar Patrika, had run up losses and decided to offload the publication and focus on Fortune, a magazine it launched in India in 2010 in a licensed partnership with Time Inc.

Reeling under a global economic crisis, India’s GDP growth had fallen to 5 percent in 2012-13. Most media houses were teetering on the brink of a crisis as sluggish industrial growth and fall in ad revenues hit them hard.

Staring at the prospect of an imminent shutdown, then editor Prosenjit Datta quickly sewed up a business plan. Launched in 1981, BW Businessworld, the only weekly in India, had built a loyal reader base, with a circulation of over 60,000 copies. Just before the sale, the ABP Group had turned it into a fortnightly.

Datta’s plan was to leverage the magazine’s reputation and raise around Rs 30 crore from investors to make it profitable. For ABP, the magazine’s skimpy profit or loss margins did not make much difference in a good year, but mattered when the group suffered a loss. Some people at BW had even blamed ABP for meting out stepmotherly treatment to the magazine: the group never treated it as a separate business entity and nor did it have an independent space-selling team.

Datta’s proposal was liked by a few investors, but time was running out.

In early September 2013, the promoter and chief editor Aveek Sarkar invited Datta for lunch. He told him that he had found a buyer for BW in Anurag Batra, a first-generation media entrepreneur, journalist and an eternal optimist rolled into one, as his LinkedIn profile declares. Batra was then known as owner of Exchange4Media, a platform for information on the advertising and marketing industry.

The deal, the contours of which are still under wraps, was pegged at about Rs 8 crore. It had three components – an upfront payment, a monthly fee paid to ABP for handholding BW’s marketing functions, a lease rental to operate from the same place leased by ABP.

The magazine was operating out of two floors of the Express Building on Delhi’s Bahadur Shah Zafar Marg. Barring a fairly large reporting team in Mumbai and reporters in a few other cities, BW’s production, design, desk and photo departments were all based in Delhi, with 50 people working in various editorial departments.

An old friend of Batra, Vikram Jhunjhunwala, who ran a boutique investment banking and asset management firm, Shrine Capital, helped him sew up the deal. Jhunjhunwala was offered about 1 percent stake as sweat equity. Similarly, Amit Kapoor, a faculty of leading business schools who built the Institute for Competitiveness, also received shares in the company.

A statement issued on September 19, 2013 said ABP had sold the magazine to Batra and Jhunjhunwala for an undisclosed amount, giving the impression that Jhunjhunwala, along with Batra, funded the deal. In fact, Batra had raised a loan from a Mumbai-based media magnate to close the deal.

The takeover surprised many people in the Mumbai office.

On his first visit to the Mumbai office, Batra spoke briefly to the top editorial staff, standing in the bay. “I am going to transform the magazine. Will leverage and create a bouquet of products,” he assured them.

There was an air of ebullience in the newsroom.

In just a couple of months, however, the new owner, GBN Media, later rechristened Businessworld Media, was caught in a whirl of a cash crunch. Salaries of staffers, credited by the last day of the month, got delayed by a week, triggering murmurs in the office.

An apologetic Batra offered to make advances to employees faced with EMI payments.

There were efforts to effect a quick turnaround, but they proved futile. So Batra cut manpower to drive down costs.

A former staff member said, “Like many other magazines in those days, Batra introduced the concept of sponsored content to drive revenues”.

Batra looked at corporate events, award functions and conferences to bring in the money. He expanded the marketing department and introduced several innovative titles to leverage the BW brand, introducing a string of B2B magazines, online and offline, such as BW Disrupt, BW Hotelier, BW Education, BW People, BW Smart Cities, BW Healthcare World, and BW CIO.

For Batra, BW was like a mothership, from which he set sail several small ships – the B2B magazines – forming a flotilla.

These magazines complemented BW’s corporate events. “The plan was to develop corporate events centred around different communities such as start-ups, entrepreneurs, investment advisors, restaurateurs, educationists, and such,” said a former employee who worked in the BW events team for several years. “The B2B magazines catered to these communities.”

Batra’s foray into B2B magazine space though wasn’t supported by editorial strength, insiders said. It soon slipped into making a quick buck from sponsored content and corporate sponsorships.

“Most of these magazines didn’t have any fixed frequency. They were devoid of ads. They were merely supporting an upcoming corporate event focused on the community,” said a BW staffer.

Batra’s plan was to build a large business house out of BW with events and conferences at its core. “As BW faced a severe cash crunch, he had to raise working capital loans, and the debt became a big burden. His plan of selling stake at a much higher valuation remained on paper. In the process, he failed to focus on the editorial quality,” said an ex-employee who worked with Batra for several years.

Seeing the BW mothership was adrift, a steady stream of editors jumped the ship, until Batra donned the editor’s robes himself in 2016.

Meanwhile, Prosenjit Datta departed in August 2014 and moved to the rival Business Today, nearly a year after the takeover. Rajeev Dubey was given the mandate but he left in four months, following Datta. A senior staffer in the Delhi bureau, Ashok Raaj, took charge temporarily, only to leave in three months. In April 2015, Gurbir Singh, a senior editor in the Mumbai bureau, became the editor. He left in June 2016. Then, Batra took over himself.

Apart from the editors, several senior journalists deserted BW in the first two years after the takeover by Batra.

“The brand had taken a severe beating by then. As suggested by Batra, I met a few senior journalists for the editor’s post,” said a former BW board member. “Nobody wanted to join for obvious reasons.”

He was categorical, however, that it was unfair to blame one person for the magazine’s downfall, adding that the editorial team was equally responsible.

“Our print business was already slowing,” a former finance chief at BW pointed out. “Most of our revenues came from the event business. Cash flow issues became a regular issue.”

As BW continued to bleed, Batra had no option but to sell stake to raise money. In July 2014, less than a year after the takeover, he sold 40 percent stake for Rs 12.5 crore to Doit Creative Consumer Ventures, the family office of Rana Kapoor, whose two daughters – Radha Kapoor Khanna and Raakhe Kapoor – were inducted into the board.

Doit invested another Rs 30 crore in the company between 2014-15 and 2017-18, steadily hiking its stake above 60 percent.

At the beginning of 2016, a major cash crunch hit BW. For the first time, salaries were delayed for three months at a stretch. “That was the beginning of deferred and staggered payments at BW,” recalled a former employee.

The fall

In its initial years, BW would work with knowledge partners and a prominent jury for selecting awardees and preparing rankings of banks, B schools, entrepreneurs, and such. The partners and jury members would help BW do data crunching and select the winners in a transparent manner. They disappeared one by one over time, leaving the entire exercise to “in-house experts”.

In 2016, there were rumours that a cover story on a big industrialist in the defence sector was driven by commercial interests. And an ex-editorial staffer recalled how the “insertion of a name” in the magazine’s coveted list of top B schools led to disquiet in the newsroom until the attempt was thwarted by the editor.

The company defended the selection process. Referring to its B school rankings, it claimed that institutions were assessed in consultation with category experts and rigorous research by BW Education. “Finally, the editorial team analyses the list against various publicly available parameters to finalise the rankings.”

But internal strife continued. “By mid-2015 it was a daily routine of fighting and warding off editorial interference by Batra,” said a former editor who worked at BW for several years.

For the B school issue of November 2015, to take one example, the BW sales team negotiated an ad from a Coimbatore-based school of business management on the condition that the magazine would carry an article by its chairman. The institute was ranked among the top 40 B schools in the list. Similarly in February 2016, the editorial slot of ‘In Conversation’ appeared with an ad masquerading as Q&A with the chairman of a water treatment company, prompting the editor to object to such arbitrary practices and breach of editorial ethics. Newslaundry accessed a string of emails by senior editors to Batra opposing such practices.

Batra was unmoved however, and his handling of a cover story on IPL and Star TV Network, in May 2016, became a flashpoint.

On the night of May 20, when the edition had gone to the press, Batra halted the printing. He asked a senior official in the Kapoor family’s office who was also a director in Dabang Sports Management Company, then a bidder at IPL auctions, to rewrite the cover story. The story was on how Star TV Network had moved its focus to sports and cricket broadcasting. “You did not bother to consult the editor/writer nor did you think it was a violation of BW’s long-standing editorial norms. Asking a sports bidder to write and comment on our cover story was clearly a conflict of interest,” the editor told Batra in an email, a copy of which is with Newslaundry.

A few days earlier, while the story was being readied, the editor had received a call from the president of one of the companies mentioned in it. She informed him of the company’s inability to “participate in the cover story and make any payment”, referring to the demand made by the magazine’s marketing department. The editor was aghast. It was eventually left to an independent director, appointed by the Kapoor family’s office, to handle the matter and broker a semblance of a truce.

It didn’t last long.

On June 2, 2016, barely a month before he stepped down, the editor, Gurbir Singh, wrote to the team, “For me, the whammy has been worse, struggling as I have to keep editorial content clean and stave off unwanted bad practices that compromise the basic tenets of journalism. A few recent incidents have convinced me that we are on the edge of a precipice.”

In a statement to Newslaundry, Batra denied all allegations of carrying paid news or manipulating awards or rankings, with a direct threat, “Any specific allusion to such allegations without proof would be subject to legal action as they constitute direct defamation. BW does carry paid content in the same manner that all publications do, and as per industry norms, it is clearly marked as such – and no editorial content is carried as ‘paid news’. Further all awards are, for the past many years, and up till today, decided by a jury of most eminent professionals, through a transparent process which is duly recorded.”

In spite of questions over its quality and credibility, Batra managed to sell BW using his clout and networking skills. The magazine’s brand visibility went up, thanks in no small part to hoardings at Delhi’s Metro stations. An excellent space-selling team set up by Batra kept bringing in the money to run the show even as the company struggled to make ends meet.

As per a company statement, Businessworld Media’s revenues grew about five times between 2014-15 and 2018-19 while its expense-to-revenue ratio came down 1.3 times. “The turnaround of a stressed business is a complex and investment intensive process and there are bound to be periods of financial strain,” the statement added.

Pending payments

Dinkar Marla, an independent director of the media company who left its board in the last quarter of 2019, contended that problems related to delayed salaries and vendor payments were purely operational issues. “Every print media faced cash flow issues,” he said. “According to me, Batra made a phenomenal effort to pull it off.”

But over a dozen former and current staffers Newslaundry spoke with differed with Marla.

“Batra’s strategy looks simple: hold back salary and make staggered payments with a long delay,” one of them said. “This forces journalists to continue with him. Even my pleas for salary when my family members were in hospital fell on deaf ears.”

Indeed, each of these former and current employees had a story to tell.

In June 2018, as salaries were delayed for months, the Mumbai team got together and wrote three letters to the board. They told Batra to “terminate their services” after settling their dues and showing proof that statutory payments towards PF and TDS had been made.

This opened a Pandora’s box of allegations and counter-allegations. An angry Batra asked a few of the staffers to leave. “He would not sack anyone, but demand a resignation letter. If the employee doesn’t relent, he will get a dressing down from the promoter over ‘poor performance’ and make his life miserable,” said a former company official.

The company failed to honour full and final settlements of employees who quit or were asked to go on rare occasions. Some employees approached a labour court, while some others managed to reach a compromise. As of now, at least two cases are pending in Mumbai’s labour court involving illegal termination, non-payment of salaries and other perks/variables.

“We are aware of certain employees approaching labour courts,” the company said in the statement. “We would not comment on the merits of any sub-judice matter.”

For employees in Mumbai, it was a rollercoaster ride.

Soon after the takeover by Batra, the Mumbai office was shifted to Empire Mills, Lower Parel. In 2015, the employees weren’t allowed to enter the premises as the company failed to make payments and pending dues mounted. In 2016-17, the office was again moved to Raghuvanshi Mills Estate, next to Palladium Mall. Beginning January 2018, it was shut for five months because the company failed to pay the rent.

In June 2020, during the national lockdown to contain the Covid pandemic, a massive fire gutted the office.

In Mumbai, Batra used to operate from the business centres of Four Seasons and Taj Lands End hotels, sources said. He would call senior employees and editorial staff there, and hold client meetings.

Batra’s investment

BW gave Batra a grand entry into the media space. He began to be called a media tycoon.

He commanded respect among the company directors, mostly his friends. A former director of Businessworld Media and a media veteran said Batra ran a tight ship. “During our time, we tried to bolster circulation and revenues. We were not part of the magazine’s day-to-day operations,” he added, speaking anonymously.

Another board member squarely blamed the downfall on the declining print media business. “Most industries which once used to be heavy advertisers are in the throes of a recession,” he said. “Batra tried his best to reinvigorate the brand with higher visibility and networking. But funding issues kept cropping up.” He too refused to be named.

“Batra is an all-out marketing man. He is a Bible for networking. Whenever he came back from an event/conference, he brought to his secretary at least 25-30 visiting cards of new friends he made in the industry. He carefully built rapport with corporate biggies who later supported his events,” said a former colleague of Batra.

Journalists who worked closely with Batra differed.

“It is like Batra took over a five-star property and reduced it to a road-side dhaba,” said an angry employee, arguing that the four decades of BW should be bifurcated to distinguish the 32 years of ABP control, when editors such as TN Ninan and Tony Joseph took the magazine it great heights, and eight years under Batra.

A former employee said Batra probably wanted to do everything on his own. “He should have got a good editor and a good operations guy. And he should have focused on marketing, brand building and deal making, which is his forte,” he said.

While the opinion on Batra’s ways of management is sharply divided, many questions remain unanswered. Why, despite having a majority ownership, did the Kapoor family’s office remain a silent partner, even when the magazine faced headwinds? Is the company doing the mandatory filings? Why is the board not meeting?

Some insiders believe that the troubles of Yes Bank and the arrest of its promoter as well as the pandemic came as a blessing in disguise for Batra.

Refuting allegations that the board members regularly bickered, the company claimed that discussions about operational matters were always taken up transparently. “There is no record of any disputes between BW and its investor,” it added. “Management control, as is the normal practice, remained with the founder (in this case, the acquiring founder) and his team. At no point has anyone from the family office or any of their related entities held any executive position or exercised management control over the business on account of a majority holding.”

Radha Kapoor refused to speak with us, despite several attempts.

Future of BW

Can Batra bring in new investors?

As always, he is optimistic.

In the last few years, BW has been reduced to a slim magazine of under 100 pages, managed by a ragtag team. The company has over 100 employees currently, including 30 editorial personnel, nearly two dozen of them newbies. It’s left to a few hardworking editorial staff to keep the magazine afloat.

The number of readers and advertisers has shrunk, and the magazine now runs mostly on government ad revenue. The lockdowns of 2020 and 2021 have proved the proverbial final nail in the coffin. The magazine goes to print every fortnight, but the print order has dropped drastically.

“Half of the magazine is filled with random columns,” said a staffer, reflecting on its current state. “Each edition used to be in three parts – first with news stories, second with long-form stories, and third with light-reading stuff in the fields of leisure, travel, book reviews, etc. Now, there is no such demarcation and hardly any meaningful content.”

“It’s a sinking ship, sailing rudderless,” he added.