Zee Entertainment faced more trouble on March 15 when Star India, owned by Walt Disney, started arbitration proceedings against it. This came after Zee allegedly failed to comply with the terms of a $1.4 billion cricket broadcasting deal. Star India seeks damages for the breach.
After the Zee-Sony deal fell through, Zee Entertainment Enterprises decided to terminate the agreement to broadcast ICC men’s and under-19 tournaments. This led to Zee terminating the agreement signed in 2022. Under the London Court of International Arbitration Rules, Star India claimed Zee violated the terms of the August 26, 2022 agreement.
Star India Initiates Arbitration Against Zee Entertainment
Zee Entertainment revealed that Star India Private Ltd has alleged non-compliance with the terms of the Alliance Agreement dated August 26, 2022, concerning sub-license rights for ICC men’s cricket events from 2024 to 2027. Zee Entertainment disclosed this information in an exchange filing, stating that Star India is seeking specific performance of the agreement or damages, which are undetermined.
As a result, Zee’s shares on the BSE were trading 3% lower at Rs 142.2 apiece on March 15. The arbitration is being conducted under the Arbitration Rules of the London Court of International Arbitration.
Zee disagrees with Star’s claim and plans to submit an appropriate response. Despite its initial assessment and legal advice, Zee intends to counterclaim and take necessary actions.
Zee to Broadcast ICC Tournaments as Disney Star Retains Digital Rights
In 2022, Disney Star licensed part of its ICC rights to Zee Entertainment Enterprises for the Indian market. This agreement grants Zee exclusive broadcasting rights for ICC men’s and Under-19 tournaments in India from 2024 to 2027, while Disney Star retains digital rights for the same events. The upcoming cycle includes four men’s marquee events: two T20 World Cups (2024 and 2026), the 2025 Champions Trophy, and the 2027 ODI World Cup. However, Zee’s acquisition of ICC TV rights is pending approval from certain conditions precedent, including financial commitments, guarantees, and ICC approval for sub-licensing.
Zee is facing challenges with declining profits, advertising revenue, and cash reserves in a competitive market where global streaming giants like Netflix and Amazon.com are also vying for market share. In January, Sony Group Corp announced the cancellation of its merger with Zee Entertainment’s India unit due to a deadlock over leadership of the merged entity.
Also Read: Reliance Buys Paramount’s 13% Stake in Viacom18 for ₹4,286 Crore
Paytm FASTag Users Must Switch to Other Banks Before March 15, Urges NHAI
DHL Global Connectedness Report 2024: India Ranks 62nd, US 44th
