Zee Entertainment withdraws from $1.4B agreement with Disney Star
ZEEL has reportedly failed to make the initial payment of approximately $200 million and will not proceed with the agreement, according to industry insiders cited by PTI.
Zee Entertainment has withdrawn from a $1.4 billion licensing agreement with Disney Star for TV broadcast rights for cricket matches as a consequence of the collapse of its merger deal with Sony, according to sources within the industry.
Zee Entertainment Enterprises Ltd (ZEEL) has reportedly failed to make the initial payment of approximately $200 million and will not proceed with the agreement, according to industry insiders cited by PTI.
Another source in the industry confirmed the development, stating that the missed instalment was part of the $1.5 billion investment committed by Sony Group following its merger with ZEEL.
On Monday, Sony Corporation officially terminated the $10 billion merger agreement with ZEEL, simultaneously seeking $90 million for breach of conditions and initiating arbitration.
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As per the merger agreement between ZEEL and Sony, the Japanese entity was supposed to invest $1.575 billion in the merged entity and have a majority stake.
There were no immediate comments from ZEEL over the development.
Punit Goenka, the Managing Director and CEO of ZEEL, spoke at a global town hall meeting three days after Sony terminated the deal. Addressing approximately 3,000 employees worldwide, he encouraged them to look ahead and pursue new opportunities.
"Our industry is witnessing rapid changes, and these winds of change are giving us a new shape. We have to mould ourselves to be well-positioned in order to capitalise on the opportunities coming our way. We have been leaders over the last three decades and have delivered value to our stakeholders, year on year," he said.
On August 30, 2022, ZEEL announced entering into a strategic licensing agreement with Disney Star for television broadcasting rights of the ICC Men's and Under-19 global events for a period of four years.
Disney Star will continue to exclusively stream all ICC tournaments through its digital platform Disney+ Hotstar, a joint statement had said.
This was done with the in-principle approval from the International Cricket Council (ICC).
Disney Star bagged the broadcast rights of all ICC events for four years from 2024 to 2027 for the Indian market from the sport's global governing body.
According to the agreement, ZEEL was slated to possess exclusive television rights for ICC men's events. These events include the ICC Men's T20 World Cup scheduled for 2024 and 2026, the ICC Men's Champions Trophy in 2025, and the ICC Men's Cricket World Cup in 2027, along with significant ICC U-19 events.
ZEEL on Wednesday approached the National Company Law Tribunal (NCLT) to get Sony to honour a $10 billion merger deal.
Sony had resisted the demand by Subhash Chandra's son Punit Goenka, who was investigated by Sebi over fraud allegations, to stay on after the merger.
It has also initiated appropriate legal actions to contest the claims of $90 million (Rs 748.5 crore) filed by Sony Group before the Singapore International Arbitration Centre (SIAC).
Edited by Kanishk Singh