Reeling under the impact of the collapsed merger with Sony and on-going battle, now Zee Entertainment Enterprises Ltd is claiming Rs 69 crore from Walt Disney-owned Star India for violating the ICC TV rights agreement between the two entertainment and media firms.
Zee said in its Q3 financial statements that it has strong grounds to counter Star India’s claims in the ICC TV rights agreement matter. The company added that it has accrued Rs 72.1 crore for bank guarantee commission and interest expenses for its share of bank guarantee and deposit.
The contract between Zee Entertainment and Star India for the ICC cricket TV rights may get terminated over the alleged breach of the Alliance Agreement between the two parties.
Star India had sent letters to Zee alleging a breach of the agreement during the December quarter of FY24 on account of non-payment of dues for the rights concerning the first instalment of the rights fee aggregating to $203.56 million or Rs 1,693.42 crore. This was along with the payment for bank guarantee commission and deposit interest aggregating Rs 17 crore and financial commitments including furnishing of corporate guarantee confirmation as stated in the alliance agreement, Zee said in a document released along with its Q3FY24 results on February 13.
On the other hand, Zee said that Star has not acted as per the agreement and has failed to obtain necessary approvals, and execution of necessary documentation and agreements. The company’s management believes that Star by its conduct has breached the Alliance Agreement and is in default of the terms thereof and consequently, the contract stands repudiated.
Zee said that it has communicated to Star that the alliance agreement cannot be preceded and has sought a refund of Rs 68.54 crore paid to Star.
Zee-Star ICC TV rights deal snapshot
Zee Entertainment had informed the Walt Disney Company that it did not intend to progress with the deal to purchase the cricket TV rights that it acquired from the firm.
In August 2023, Zee informed stock exchanges across India that it had signed a licensing agreement with Disney to obtain International Cricket Council (ICC) TV rights for a period of four years, starting 2024.
As per the agreement, Disney Star would have licensed the TV broadcasting rights of the International Cricket Council (ICC) Men’s and under-19 global events for a four-year period to Zee. Disney Star would continue to have exclusive digital rights for its digital platform (Disney+ Hotstar). Zee would make staggered annual payments from CY24 onwards.
Disney Star had won the rights to telecast the ICC tournaments till 2027 for $3 billion after a closed-loop bid process. That deal included both digital and television rights for men’s and women’s ICC tournaments. It was a big plus for Disney Star, which had lost the digital rights of the Indian Premier League (IPL) for the 2023-27 cycle to Viacom18 in June.
Read More: ZEE troubles mount; Star India sends letter to Zee alleging breach over ICC cricket TV rights deal