Zee Entertainment has indicated to Disney Star that it does not intend to move forward with a $1.5-billion TV sub-licensing deal for International Cricket Council (ICC) tournaments for the 2024-27 period, informed sources have told FE.
While this brings to an end the uncertainty around the contract, Disney may drag Zee to court for not honouring the deal, which was signed in August 2022. Zee did not respond when contacted, while Disney Star declined to comment on the issue.
Indications of Zee’s pullback, say industry sources, was becoming apparent when Disney Star began making advertising pitches to media agencies ahead of the Under-19 ICC World Cup, which began on January 19 in South Africa.
Star Sports is broadcasting the tournament on television right now, while the digital feed is available on Disney+ Hotstar. Disney Star had bagged both the TV and digital rights for ICC tournaments for 2024-27 for $3 billion in August of 2022, sub-licensing the TV rights to Zee within days of acquiring the property.
Media experts say that Zee had signed the sub-licensing deal with Disney Star in view of its proposed merger with Sony, which was infusing $1.5 billion in cash into the merged entity. However, with the proposed merger being called off earlier this week by Sony, the agreement with Disney Star would have been difficult to fulfill.
“Zee not honouring the Disney TV rights contract is in line with expectation, since it could have been fulfilled only if the merger with Sony was happening,” said Karan Taurani, senior vice-president, research at Mumbai-based brokerage Elara Capital.
“However, this could lead to another legal overhang for Zee, apart from ongoing legal issues with Sony,” Taurani said.
On Wednesday, Zee said that it was moving the Mumbai bench of the National Company Law Tribunal (NCLT) against Culver Max Entertainment and Bangla Entertainment, also known as Sony Pictures Networks India, asking the firm to withdraw its termination notice and implement the merger scheme, sanctioned by the tribunal last year.
Zee also termed the $90-million (Rs 750 crore) termination fee by Sony as being “legally untenable” in a notice to the stock exchanges, saying there was no basis to it. Zee also said that it had initiated legal action against Sony’s arbitration proceedings at the Singapore International Arbitration Centre (SIAC), adding that it would contest all claims made by Sony.
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