Colors, Karan Johar’s Firm Sign 12-Film Deal for Next 4 Years

MUMBAI: In one of the biggest satellite deals in recent times, Viacom18’s Hindi entertainment channel Colors has signed an agreement with Karan Johar’s Dharma Productions for 12 films over the next four years. Johar and Colors CEO Raj Nayak confirmed the deal, but refused to share financial details. Industry watchers pegged it at anywhere between 275 crore and 350 crore. "It is a multi-layered , performance linked deal," Nayak said. "From a general entertainment channel (GEC) perspective, movies are important, yet we don’t need to overdo it. A few blockbusters are strategic in nature but they must make business sense as well,"he said.

Nayak’s last big purchase of films was a nine-film deal with Eros last year. Johar has played host in Colors shows Jhalak Dikhla Jaa and India’s Got Talent."Colors is a successful GEC and high on content, the level of trust we share is also an important aspect of this deal" Johar said. Out of the 12 films in the deal, just one has been released . The rest will be made over the next four years.

About two years ago, Viacom 18 had announced a movie channel only to drop the plan and sell about 500 films from its library to Star Network. In the past, in the race for grabbing exclusive rights of films, channels paid big sums as soon as they were announced. But now while a base sum is decided, every slab thereafter is linked to the box office performance of the film.

In the case of Chennai Express, the base that Zee is said to have decided on to pay UTV was . 40 crore plus for seven years, with every . 10 crore earned over . 130 crore netting in an additional . 2 crore for the studio. While the satellite market has seen many ups and downs, it remains a huge source of income for producers and makes up for 20-35 % of a film’s recovery costs. For studios, it also reduces the risk prior to their release.