Star India has sought $940 million (`8,000 crore) in damages from Zee Entertainment over termination of a media deal involving television rights for the 2024-27 ICC tournaments. Star had sub-licensed the media rights to Zee in August 2022 for $1.5 billion. Since the deal had failed to close, Star, which is merging with Viacom18, had initiated arbitration proceedings in March 2024.
Zee informed the stock exchanges on Wednesday that Star had filed a ‘Statement of Case’ before the London Court of International Arbitration (LCIA) on Monday, claiming for damages since the deal had been terminated by it (Star). Experts say that the legal battle could be long-drawn since no side is willing to let go yet.
“The company (Zee)categorically refutes all claims and assertions made by Star including its claims for damages. The arbitration is at its initial stage and the LCIA Arbitral Tribunal is yet to determine if the company (Zee) is liable in any manner. The company will contest all unfounded claims by Star and reserves all its rights,” Zee said in its disclosure to the stock exchanges.
Shares of Zee were down 1.39% on the BSE following Zee’s disclosure, hovering at around `131.05 apiece.
Earlier this year, Zee had alleged that Star had not acted in accordance with the alliance agreement over sharing of TV broadcast rights of ICC cricket matches, and that the acquisition of the ICC TV media rights were subject to certain conditions. This included submitting financial commitments, bank guarantees and ICC approval for sub-licensing to Zee, which were pending.
Star had sent letters to Zee alleging breach of agreement over non-payment of rights fee aggregating to $203.56 million (`1,693.42 crore). On the other hand, Zee said that Star had failed to obtain necessary approvals and had defaulted on the terms, resulting in the repudiation of the contract.
Analysts say that the ICC broadcast deal could result in annual losses of `1,520 crore in FY25 for Zee due to high content cost, lower sports ad revenue on TV and availability of free cricket content on streaming platforms.
Zee had reported a declined of 3.6% year-on-year in domestic advertising revenue for the June quarter, impacted by cricket and general elections.