Variety: Zee Walks Away From $1.4 Billion Cricket Rights Deal With Disney After Failed Sony Merger

Story from Variety:

India’s Zee Entertainment Enterprises Limited (ZEEL) is not proceeding with a $1.4 billion cricket rights deal it had struck with Disney Star in 2022, according to a report from Reuters.

Cricket is the most popular sport in India, the world’s most populous nation. In August 2022, Disney Star had won Indian TV and digital rights to both men’s and women’s global events conducted by the International Cricket Council (ICC) from 2024 through 2027. A week later it licenced Indian television broadcasting rights for ICC men’s and under-19 tournaments to ZEEL for four years.

Under the terms of the deal, Disney Star would continue to be the exclusive streaming home for all ICC tournaments in India via streamer Disney+ Hotstar. ZEEL would be the exclusive Indian television rights holder of 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) along with several ICC under-19 events.

However, earlier this week, Sony Group Corporation ended its more than two-year attempt to merge its TV and streaming businesses in India with ZEEL. The deal would have created a conglomerate with a valuation estimated at around $10 billion. The deal cancelation news wiped out some 30% of ZEEL’s share price and, after a string of depressed quarterly profits, ZEEL may be financially weakened.

Additionally, Sony and ZEEL are now in a legal battle, with the former claiming a $90 million termination fee from the latter.

Quoting “two people with direct knowledge of the matter,” the Reuters report says that ZEEL missed the first $200 million payment to Disney in recent weeks. ZEEL also told Disney that it was “walking back on the deal,” Reuters said.

“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].”

Disney declined to comment when approached by Variety. ZEEL had not responded to Variety‘s request for comment at the time of publication.

The development has potentially larger ramifications. Disney and billionaire Mukesh Ambani’s Reliance Industries have in recent weeks moved closer to a merger of their massive Indian TV and streaming businesses. A combination of the two – which include rival streaming platforms, India’s leading pay-TV platform and over 100 linear TV channels – has the potential to substantially re-shape the Indian media and entertainment scene. The non-payment of the $1.4 billion cricket rights fee to Disney could wipe that amount, or more, off the value of the company’s India operations.