In a significant industry development, Zee Entertainment Enterprises Ltd (ZEEL) has withdrawn from a $1.4 billion licensing agreement with Disney Star for TV broadcast rights for cricket matches. This decision comes as a consequence of the collapse of ZEEL’s merger deal with Sony. According to industry sources, ZEEL failed to make the initial payment of approximately $200 million and will not proceed with the agreement.
An insider revealed, “Zee Entertainment Enterprises Ltd (ZEEL) has reportedly failed to make the initial payment of approximately $200 million and will not proceed with the agreement.” Another industry source confirmed the development, stating that the missed installment was part of the $1.5 billion investment committed by Sony Group following its merger with ZEEL.
On Monday, Sony Corporation officially terminated the $10 billion merger agreement with ZEEL, simultaneously seeking $90 million for breach of conditions and initiating arbitration. According to the merger agreement between ZEEL and Sony, the Japanese entity was supposed to invest $1.575 billion in the merged entity and have a majority stake.
Punit Goenka, Managing Director and CEO of ZEEL, addressed approximately 3,000 employees worldwide in a global town hall meeting three days after Sony terminated the deal. He encouraged them to look ahead and pursue new opportunities, stating, “Our industry is witnessing rapid changes, and these winds of change are giving us a new shape. We have to mold ourselves to be well-positioned to capitalize on the opportunities coming our way.”
Regarding the licensing agreement, on August 30, 2022, ZEEL announced entering into a strategic licensing agreement with Disney Star for television broadcasting rights of the ICC Men’s and Under-19 global events for a period of four years. However, ZEEL’s withdrawal from the agreement raises questions about the future of these broadcasting rights.
ZEEL has also approached the National Company Law Tribunal (NCLT) to enforce the $10 billion merger deal with Sony. Sony, on the other hand, has resisted this demand and initiated legal actions to contest the claims of $90 million filed before the Singapore International Arbitration Centre (SIAC).
The developments reflect the intricate dynamics and challenges within the media and entertainment industry, with ZEEL navigating uncertainties following the termination of the merger deal with Sony.
Source: Startup Story
