Disney Star likely to call off ICC television rights deal with Zee

Even though Zee and Sony agreed to discuss the extension of the December 21 deadline to close the proposed merger, the already delayed merger is set to reflect negatively on the television rights of ICC tournaments that Disney Star India agreed to share with Zee.

In what was called a coup last year against Viacom18, Disney Star and Zee teamed up together to grab the ICC media rights.

Officially, Disney Star won the ICC media rights for the 2024-27 cycle for around $3 billion on August 27, 2022. But three days later, it entered into a licensing agreement with Zee Entertainment offering exclusive television rights to the latter.

In the absence of any sports channel, Zee was banking on the proposed merger with Sony Pictures Networks India to broadcast ICC matches on the sports networks of the latter.

The delay in the proposed merger has also resulted in the delay of payment in the form of a bank guarantee by Zee to Disney Star against the licensing agreement, top sources informed BestMediaInfo.com.

The matter gets further complicated as Viacom18 and Disney Star are reportedly in talks to merge their businesses.

The payment which Disney Star has to make to BCCI against IPL rights is already a sticky point in finalising its merger deal with Viacom18.

Now, the delay in payments by Zee, purportedly due to a delay in its merger with Sony is set to force all four entities to relook at the licensing agreement for ICC television rights.

As the ICC rights cycle kicks off in two weeks, Disney Star will have to telecast the tournament on Star Sports channels.

The ICC Under-19 Men's Cricket World Cup 2024 from January 19 to February 11 is the first tournament under the new media rights cycle.

“The uncertainty is hurting the ad sales teams also as they need months of planning to sell any big tournament. For example, the Disney Star team was not sure about selling ad slots and sponsorship for ICC Under-19 Men's Cricket World Cup until a month ago,” said a source quoted above.

A senior industry analyst appeared apprehensive about the future of the licensing agreement saying it is highly likely that Disney Star will call off the licensing agreement citing non-payment.

“The global entertainment giant will not risk delaying its merger with Reliance due to the delay in the Sony-Zee merger. Reliance and Disney have already committed to infuse immediate capital investment, projected to range between $1 billion and $1.5 billion. Walt Disney is expecting a similar amount from Zee against the licensing agreement. Either the capital investment will offset the shortfall in case the licensing agreement is called off or they will infuse more capital.”

“It would be a win-win scenario for the combined entity of Disney Star and Viacom18 as they have the largest sports network,” the analyst added.

As Sony and Zee enter into fresh talks to set a new deadline, Karan Taurani, SVP- Research Analyst (Media, Consumer Discretionary and Internet), Elara Capital, believes that the merger may be completed by March/April 2024 provided both agree to remove the clause to appoint Punit Goenka as the CEO of the merged entity.

Info@BestMediaInfo.com