ABN, a TV business channel owned by The Wall Street Journal, formed a three-way joint venture with the Hinduja Group and Raghav Bahl’s TV18 to run the business channel ABNi in India. After the Hindujas sold their stake to ABN, the channel quietly planned a merger with rivals CNBC. Had TV18 been left out of the deal, as was the plan, it would have meant a huge crisis, if not complete collapse, for the company. Here’s what happened next.

TV18 found some reassurance in ABN’s plans to keep ABNi going while dealing with the fallout of the joint venture’s collapse. Raghav would have been less sanguine had he known the real reason – ABN was talking to rival channel CNBC about a merger, and needed to keep the Indian operation alive.

CNBC was part of American giant NBC’s network, and it dominated the US and Europe. ABN had the upper hand in Asia, but there wasn’t enough room for two channels across all the markets at that time. The talks resulted in a merger in December 1997, and the new channel, based in Singapore, was to be called CNBC Asia as it was a better-known brand.

News of the merger landed in TV18 like a grenade with its pin pulled out.

Belatedly, TV18 realised its joint venture agreement with ABN would leave it twisting in the wind. Raghav’s legal knowledge until then had proved to be on a par with Ritu’s book-keeping, but had far more lethal consequences.

The contract did not provide TV18 with any protection in a change of control situation, a fatal flaw in a joint venture agreement. As Raghav would learn later, such protection was actually a very standard feature of joint venture agreements. But now, minus that cover, all of TV18’s investments in ABNi – about $2 million or Rs 6 crore, a huge amount for the small company with an annual turnover of about $1.5 million at the time – were at risk.

CNBC had its own office in India, and, with the merger, one of the two would have to wind up. “We had our own, these very fancy, heavy-cost journalists. Technically and legally, ABN could have just said, ‘Fine, we are finished in Asia, we are becoming another entity. Tomorrow morning, you guys stop producing. No penalty, no compensation. Good luck,’” says Raghav.

TV18 was facing another fight for survival.

Raghav, having learnt the hard way about the need for expert legal advice, asked around for a sound corporate lawyer to argue TV18’s case under the new dispensation. Would it be able to salvage a role within the new entity, or would it be cut adrift?

Today, Jyoti Sagar is one of India’s top corporate lawyers. In 1997, Jyoti Sagar Associates was a small law firm, with about 16 lawyers. They had an office in Delhi’s Sainik Farms, and a couple of lawyers working from Bangalore. But they had experience in the relatively new field of electronic media. The firm had worked on Home TV, the joint venture between Hindustan Times and the UK’s Pearson group.

Raghav had heard about Sagar and, this time, he was determined to hire a top-notch legal team, regardless of the cost. He called the lawyer to say, “Jyoti, we are not protected, we are going into this negotiation of what the future holds for us. We need professional hand-holding here.”

Raghav got a preview of Sagar’s thoroughness and hard-headed approach at once. The lawyer told him to be sure to bring a cheque for Rs 25,000 for the consultation. Raghav still jokes with him about it: “You didn’t trust us for Rs 25,000.”

But the stakes were far higher for TV18.

Sagar knew he was playing from a weak hand, but told Raghav and Binni he would try to make it about “natural justice”. That, of course, only works when the other side is honourable as well. Once again, just as he had lucked out with the BBC’s Peter Kenyatta and the “British sense of fair play” in winning IBR, fate would smile upon Raghav and TV18.

The options in front of TV18 were not great: it could go to court, not quite feasible for a small company going up against a global media giant; or it could accept a new arrangement and make the best of a bad situation. It was for the latter course that Raghav had sought legal help. Manoj Mohanka was frequently by Raghav’s side as he negotiated for their survival in Singapore and at home. Sajai Singh, a lawyer from Jyoti Sagar’s firm, also joined them for a visit to Singapore.

There they met an in-house lawyer from CNBC US and Paul France, who was the CEO of the merged ABN-CNBC entity. He had been the CEO of ABN, and the new entity had elected to retain him to lead its operations in Asia. That was a stroke of luck, as he had worked with the TV18 team for the past three years and the two sides had developed a strong rapport and sense of mutual admiration. If the CEO had turned out to be an executive from CNBC, the TV18 story might have taken a very different turn right then.

France was a big New Zealander, over six feet tall, with a booming voice and sailor’s beard, fitting for a man who loved yachting. He was nearing retirement, and this would be his last assignment. And over the past few years, for personal reasons that Raghav could hazard a guess at but never sought to confirm and prefers to keep private, France had developed an almost paternal fondness for the young, struggling, first-generation entrepreneur leading TV18. He would often call Raghav to offer informal advice and guidance during trying times. His message was, “We’ll look after you, don’t worry.”

But in Singapore, Raghav, Manoj and Sajai Singh also had to contend with the CNBC US lawyer, who came to the table without any knowledge about TV18 or inclination to listen. “She would just not budge; it was her way or the highway,” Manoj recalls. The mood within the TV18 team soon turned despondent. Raghav, who needed to salvage some sort of deal for TV18’s survival, was also unhappy with their own lawyer’s aggressive response.

Amidst this turmoil, France pulled Manoj aside for a private interview in his office and asked, “Look, are you sure you guys will be able to fund this?” Raghav was not present. Manoj sensed France was looking for some validation of his good opinion of Raghav before he could go to bat for him. “I’m absolutely confident,” Manoj replied immediately. But he wasn’t only sticking up for Raghav, Manoj says. “I was absolutely confident that we had a winner on our hands and there was no reason for us not to have the funds or not to be able to generate the revenue to be able to sustain and build this business.”

The next day, the TV18 team noticed a palpable softening in the American lawyer’s stand.

Manoj is convinced it was the result of France talking to her behind the scenes. “He did stick out his neck for us,” he says.

Raghav and Manoj returned from Singapore with renewed optimism about TV18’s prospects, but the details were yet to be ironed out. That would be done at another meeting in Delhi in January 1998, between TV18 and a team from the merged entity. Raghav was nervous – nothing was in the bag, things could change.

He was pleased to see France heading the team from Singapore. Jyoti Sagar himself attended this meeting, and he meant to play hardball. Manoj and Binni would be there as well. The meeting was held at The Oberoi. The hotel’s business conference rooms are located one level below the lobby, at the swimming pool level. Raghav remembers the coffee was very strong, almost bitter, and the chocolate cookies divine, even though his mouth was too dry to savour them.

But with Sagar at the table, Raghav realised immediately what a difference having a good lawyer at his side made. Sagar was a veteran of high-stakes corporate negotiations. He quickly laid his cards on the table: “Listen, you guys want me out” – that’s how lawyers talk, Raghav realised, saying “me” for their client – “I have no problem, but you have to compensate me for every penny I have invested, the future profits that I’ll forego, the team that will have to be dismantled, upfront costs, their severance pay…” Sagar was tough, and he would not give an inch.

With an expert lawyer taking a tough stand, and the man leading the opposing team predisposed to look upon TV18 with favour, this round of talks proved much more fruitful. Finally, after day-long talks, Raghav heard what he had been praying for: TV18 would be the Indian partner and producer for CNBC Asia, which would go on air on 2 February 1998. It was an extraordinary achievement, to be favoured over CNBC’s own unit in India, which would be closed down and all its employees laid off. Once again, TV18 had stared into the face of death but found a way to survive.

Excerpted with permission from Network18: The Audacious Story of a Start-up That Became a Media Empire, Indira Kannan, Foreword by Raghav Bahl, Penguin Random House India.