Disney India (previously Disney Star) is seeking $940 million of damages from Indian media conglomerate Zee Entertainment Enterprises Limited, it was revealed on Wednesday. The claim relates to a cricket rights deal that collapsed in January this year.
After Disney won a 2022 bid for TV and digital rights to men’s and women’s cricket events conducted through the International Cricket Council, and spanning the four years 2024-2027, the television broadcast rights to ICC men’s and under-19 tournaments were quickly sub-licensed to ZEEL for a fee of $1.4 billion.
However, since January it has become clear that the deal was not going forward. Reuters reported at the time that ZEEL had missed its first $200 million stage payment and did not have the resources to go ahead.
The companies have since begun arbitration at the London Court of International Arbitration. According to a regulatory filing by ZEEL, Disney has claimed that the agreement has now been validly terminated and that Disney is owed $940 million of damages, plus costs, expenses and interest.
ZEEL’s filing responded by saying that it “categorically refutes all claims and assertions made by Star including its claims for damages. The arbitration is at its initial stage and the LCIA Arbitral Tribunal is yet to determine if the Company is liable in any manner. [ZEEL] will, on merits, strongly contest all unfounded claims by Star and reserves all its rights.”
The case follows another corporate battle involving ZEEL.
ZEEL and Sony recently settled their dispute which had also gone to arbitration. After more than two years of negotiations, a deal to merge ZEEL and Sony India, creating a $10 billion film, TV and streaming group, fell apart. Sony accused ZEEL of failing to meet the merger conditions and walked away in January.
Since then, ZEEL has slashed its workforce and sought to blame corruption within India’s stock market regulator, SEBI, for killing off the Sony merger. In 2023, SEBI launched a probe into insider trading at ZEEL and accused ZEEL’s MD and CEO Punit Goenka of “siphoning” off company funds. The Securities and Appellate Tribunal later threw out SEBI’s order banning Goenka and chairman emeritus Subhash Chandra from holding any company office.
While ZEEL has remained in the black over the past four quarters, its profitability is low compared with previous years. Its share price, at INR132, is down 65% from December 2021, when the Sony deal was first agreed. At the current price, ZEEL is valued at a lowly INR126 billion ($1.5 billion).
Separately, Disney has in recent months agreed to sell its Indian businesses to Reliance Industries Limited, which controls Viacom18 and streamer Jio. The combination of these two large businesses had been expected to create a dominant force in digital and TV screenings of cricket, the national sport. But regulatory approval appears to be moving at pace.
Source Agencies
