Zee Entertainment Sells Sports Broadcasting Business to Sony Pictures for $385 Million
Zee Entertainments sells TEN Sports to Sony for Rs 2,583 crore
Zee Entertainment Enterprises Ltd. (Zee) announced the sale of its sports broadcasting business, TEN Sports Network, to Sony Pictures Networks India Pvt Ltd. for $385 million (Rs 2,583 crore) in cash.
The completion of the acquisition will be subject to regulatory approvals, the company said in a press release.
The TEN Sports channels being acquired include TEN 1, TEN 1 HD, TEN 2, TEN 3, TEN Golf HD, TEN Cricket, TEN Sports that operate in several countries including the Indian sub-continent, Maldives, Singapore, Hong Kong, Middle East, Caribbean.Zee Entertainment Enterprises Press Release
The sports broadcasting business delivered Rs 631 crore revenue in the financial year 2015-16, accounting for 10.79 percent of Zee’s overall topline. The business reported a net loss of Rs 37.2 crore in the same year.
The deal marks a “strategic portfolio shuffle,” Punit Goenka, the managing director of Zee Entertainment said in the press release.
While we have grown our sports business over the last 10 years through acquisition of content at competitive prices, our focus now is on transforming ourselves into an all-round media and content company, comprising of five verticals, viz. broadcast, digital, films, live events, and international business.Punit Goenka, Managing Director, Zee Entertainment Enterprises
“The acquisition of TEN Sports Network will strengthen SPN’s offering for viewers of cricket, football and fight sports,” NP Singh, the chief executive officer of Sony Pictures Networks India said in the press release.
The TEN Sports Saga
Zee acquired a 50 percent stake in Ten Sports for $57 million from Dubai-based Taj Television in November 2006. Subsequently, it acquired 45 percent stake in January 2010 for $44 million.
TEN Sports currently has telecast rights to five of the ten test playing cricket boards. Besides cricket, TEN Sports also has rights to broadcast events like The Union of European Football Associations Champions League, UEFA Europa League, Women’s Tennis Association, Tour de France, and the World Wrestling Entertainment.
Despite the impressive line-up of telecast rights, Zee’s sports business has struggled over the past decade. It had losses at operating level since
fiscal year 2008-09, although it reported an operating profit of Rs 17 crore in
first quarter of fiscal year 2016-17. Zee has invested over Rs 1,700
crore since it acquired TEN Sports in 2006, as per an Ambit report
dated August 30, 2016.
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The sale of sports business is positive for Zee Entertainment, given that the it was making losses, Vivekanand Subbaraman, a research analyst at Ambit Capital told BloombergQuint in a phone interview. Zee can now direct cash flows to growth areas, Subbaraman added.
