Zee Entertainment Backs Out of $1.4 Billion Deal with Disney
India’s Zee Entertainment Enterprises Limited has reneged on its 1.4 billion cricket rights deal with Disney Star, a move that could have lasting ramifications for the Walt Disney Company.
The deal began in August 2022, when Disney Star won Indian TV and digital rights to men’s and women’s global cricket events conducted by the International Cricket Council from 2024 through 2027.
Photo: Forbes
A week later, the company announced that it was licensing the Indian television rights for the ICC men’s and under-19 tournaments to Zee for four years.
The Original Deal
The deal was structured in a way that made Disney Star the exclusive streaming home for all ICC tournaments in India via Disney Hotstar.
Zee, meanwhile, would get the exclusive Indian television rights to ICC men’s events, including the ICC Men’s T20 World Cup (2024, 2026), ICC Men’s Champions Trophy (2025), and the ICC Men’s Cricket World Cup (2027), and several ICC under-19 events.
Photo: BBC
When Zee made the Disney deal, it was in the midst of a merger agreement with Sony that would see a merger of the Sony Group Corporation’s TV and streaming business in India with Zee.
Photo: BBC
The deal would create a media supergiant in the country with an estimated valuation of $10 billion.
Zee’s Sony Merger Falls Apart
However, after being unable to clear regulatory hurdles, Sony announced that it was ending its merger attempt after over two years.
Photo: Reuters
News of the deal’s cancelation sent Zee’s stock price plummeting by 30%. That, combined with a series of poor quarterly profits, may have put the company in dire financial straits. Additionally, Sony and Zee are now in a legal battle over a $90 million termination fee that the former says the latter owes.
Zee Backs Out
According to Reuters, the new financial situation that Zee finds itself in led the company to miss the first $200 million payment that it owed Disney in recent weeks. Additionally, Zee told Disney that it was “walking back on the deal.”
“The deal is off… Zee said they are not in a position to pay,” Reuters said, quoting one of the sources. “Zee completely reneged on the rights [agreement].”
Photo: Moneycontrol
While Disney has declined to comment on the Zee situation, the reneging of the deal could have larger ramifications for Disney’s Indian business moving forward.
Long-Term Ramifications For Disney
Disney is in the midst of their own merger with Mukesh Ambani’s Reliance Industries, which would create a conglomerate that holds the country’s two biggest streaming services and over 100 linear TV channels.
The Walt Disney Company
The non-payment of the $1.4 billion cricket rights fee to Disney could drastically change the valuation of the company’s India business.
What course Disney takes next, whether it attempts to hold Zee to the deal or find another partner, will likely drastically shape how their merger with Reliance looks.
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