Zee Entertainment is selling its sports business, Ten Sports, to Sony for $385 million (approximately Rs 2,600 crore). The sale is happening at a higher valuation than what the market was expecting. The board of Zee has approved the sale of sports broadcast operations to Sony. Zee has signed a binding pact with Sony for the sale of its sports channel operations. According to Zee, the sale of the sports business will be completed within the coming four to five months. The sports channels now under Sony’s kitty, include Ten Sports, Ten 1, Ten 2, Ten 3, Ten Golf and Ten Cricket.
The likely sale was reported by CNBC-TV 18 two days earlier. “Zee Entertainment bought 50% stake in Ten Sports in 2006 and later went on to buy 45% stake in 2010. The enterprise value of the business was around $114 million. However this business has been reporting an EBIT loss for Zee,” the channel had said. “It was only in the last quarter that it reported an EBIT profit. Zee has been struggling with this business for the last 10 years, and they wanted to be out of sports business,” the channel added. With the sale of Ten Sports to Sony, an EBIT loss of Rs 100 crore will be relieved, the channel added.
From the point of view of Sony, the deal would add a big bouquet of sports channels to its existing portfolio. This could be one of the biggest deals in the sports business in recent times.