Disney Star Considers Legal Action Against ZEEL Following Failed Sub-Licensing Deal Amidst Sony Merger Fallout
According to industry insiders, Disney Star is contemplating legal action against Zee Entertainment due to the latter’s withdrawal from a $1.4 billion sub-licensing deal for televising international cricket matches in India.
ZEEL, having failed to pay the initial $200 million due, has communicated its decision not to proceed with the agreement to Disney Star.
Industry insiders suggest that this decision reportedly resulted from the failed merger with Sony.
Another source confirmed that the payment to Disney Star was part of the $1.5 billion Sony Group pledged following its intended merger with ZEEL.
Sony Corporation announced that it had cancelled the $10 billion merger with ZEEL, demanded $90 million for contract violations, and started arbitration proceedings.
Under the merger terms with Sony, the latter was to invest $1.575 billion in the merged entity, securing a majority share.
Neither ZEEL nor Disney Star has commented on the matter yet.
On August 30, 2022, ZEEL declared a four-year strategic licensing deal with Disney Star for the TV rights to ICC Men’s and Under-19 tournaments.
Disney Star also announced it would exclusively stream ICC tournaments on its digital platform, Disney+ Hotstar, following a joint statement.
This agreement received provisional approval from the International Cricket Council (ICC).
For the Indian territory, Disney Star acquired the rights to all ICC events from 2024 to 2027 from the ICC.
Under the deal, ZEEL was granted exclusive TV rights for key ICC men’s events, including the ICC Men’s T20 World Cup in 2024 and 2026, the ICC Men’s Champions Trophy in 2025, and the ICC Men’s Cricket World Cup in 2027, as well as significant ICC U-19 tournaments.
ZEEL sought intervention from the National Company Law Tribunal (NCLT) against Sony to enforce the $10 billion merger agreement.
Sony resisted ZEEL CEO Punit Goenka’s demand to retain his position post-merger amidst SEBI’s investigation into fraud allegations against him.
ZEEL is also challenging Sony’s $90 million claim filed at the Singapore International Arbitration Centre (SIAC).
Following Sony’s withdrawal from the merger, ZEEL’s MD & CEO Punit Goenka held a global town hall for approximately 3,000 employees, urging them to pursue new opportunities amidst the changing industry landscape.
Sony has officially retracted its merger proposal with Zee Entertainment Enterprises, ending a two-year pursuit and leaving Zee to face heightened competition as its rivals expand.
Ragul Thangavel
With over nine years of diverse professional experience, Ragul has made significant contributions across various domains, including Media Operations, OTT Technologies, Video Production, Ecommerce, and Social Media.
Holding an Engineering degree, Ragul's career took an unconventional turn when he discovered his passion for writing, leading him to begin his journey as a content writer.
His career has been exclusively dedicated to the growth and development of startups, where he has played a pivotal role. His unique blend of technical knowledge and creative prowess has enabled him to drive innovation and success in every venture he has been a part of.