The new media rights cycle kicks off next month. The $1.5 billion International Cricket Council (ICC) TV rights deal between the Disney Star and Zee Entertainment Enterprises, announced in August 2022 remains precarious as Zee hasn’t yet given the necessary bank guarantees to Disney Star, reported ET.
Recently, news of a potential merger between Viacom18 and Star India has been floating after Disney Star’s parent Walt Disney signed a non-binding agreement with Reliance Industries (RIL). If the ICC deal is likely to fall through, it will have massive influence on the due diligence of Walt Disney as well as RIL.
As per the agreement, Disney Star will license 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 will continue to have exclusive digital rights for its digital platform (Disney+ Hotstar). Zee will 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.
The agreement with Disney Star enables Zee to be the exclusive television rights holder of ICC men’s events, including the coveted 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 key ICC U-19 events.
In the case that the ICC deal doesn’t go through, Disney Star will have to service the $3 billion sports rights obligation over the next four years.
Disney Star is already treading close to hot water, with the massive loss it has witnessed in subscriber count as well as the mass exodus not too long ago. The company’s valuation is likely to drop due to expected losses from sports. Considering the ICC TV rights and the already owned Indian Premier League (IPL) TV rights, Disney Star has committed $6 billion. It will be a mammoth task to try and recover those costs.
If Zee fails to hold up their end of the deal, Disney Star is likely to take them to court. Zee is currently navigating its long-pending merger deal with Sony Pictures Networks India.
As per reports, Zee had earlier acquired the ICC TV rights with the expectation that their merger with Sony would be a no-hassle process. As a result, Disney Star would invest the $1.5 billion as growth capital in the newly formed merged company.
It is only a matter of time until all speculation ends and results surface.