Zee sells TEN Sports to Sony for $385 million
Zee Entertainment says it will now focus more on the entertainment space; TEN Sports acquisition to strengthen Sony’s sports offering
New Delhi: Zee Entertainment Enterprises Ltd (ZEEL) announced on Wednesday the sale of its sports network TEN Sports to Sony Pictures Network (SPN) in an all-cash deal worth $385 million.
TEN Sports’ portfolio includes TEN 1, TEN 1 HD (high definition), TEN 2, TEN 3, TEN Golf HD, TEN Cricket and TEN Sports. The network operates these channels across India, the Maldives, Singapore, Hong Kong, Middle East and the Caribbean.
In a filing to the Bombay Stock Exchange on Wednesday, ZEEL said the board of directors of the company had approved the sale and transfer of Zee’s sports broadcasting business to SPN. The TEN Sports network is currently held by two ZEEL subsidiaries—Taj Television Ltd, Mauritius; and Taj Television (India) Pvt. Ltd.
“This is a landmark deal for Zee,” said Punit Goenka, managing director at ZEEL, adding that the sale was a step towards a strategic shuffle of its portfolio of channels as the broadcaster seeks to expand its general entertainment business.
“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: broadcast, digital, films, live events and international business,” said Goenka.
He added that the company will be focusing on its general entertainment business, especially in the regional space. “We’ll be driven by the regional bouquet,” he said, adding that Zee will be launching a Telegu movie channel in September.
Completion of the acquisition is still subject to regulatory approval. The transaction is expected to close in four-five months.
N.P. Singh, chief executive of Sony Pictures Network India, said the acquisition will strengthen Sony’s sports offering.
“The acquisition of TEN sports network will strengthen SPN’s offering for viewers of cricket, football and fight sports, complementing our existing portfolio of international and domestic sporting properties,” he said.
Sony already holds exclusive broadcast rights to one of the strongest cricket properties in India—the Indian Premier League (IPL). The acquisition of TEN Sports will give it access to matches hosted by the cricket boards of South Africa, Pakistan, Sri Lanka, West Indies and Zimbabwe.
“TEN has been a very strong sports brand which has been in the market for over a decade and has been doing well. They have a very strong portfolio which complements our existing rights. This acquisition will help us strengthen our presence in markets outside India as well,” said Singh.
In addition, TEN Sports has the rights to World Wrestling Entertainment matches, football (UEFA Champions League, UEFA Europa League, French League, English Football League Cup), tennis (WTA Events, ATP events), golf (European Tour, Asian Tour, Ryder Cup, US PGA Championship, LPGA Tour, Professional Golf Tour of India and Golf Channel Block), athletics (Asian Games, Commonwealth Games), motor sports (Moto GP) and cycling (Tour de France) events.
“I am sure that this deal will add a lot to Sony’s sports bouquet. It is a business fit for Zee to get out from sports and focus more on their entertainment space,” said Tuhin Mishra, co-founder of sports marketing firm Baseline Ventures.
For the year 2015-16, Zee’s sports broadcasting business contributed Rs.631 crore, about 10.79% of the consolidated revenue of the company. The business registered a loss of Rs.37.2 crore in 2015-16.
Indraneel Das Blah, co-founder and partner at sports marketing agency Kwan Entertainment and Marketing Solutions, said, “There’s been a consolidation in the sports broadcast business with this deal. Now we are down to two big players- Star and Sony.”
Star India has the broadcast and digital rights for all cricket played in India until 2018 through a deal with Board of Control for Cricket in India (BCCI). Star had paid Rs.3,851 crore in 2012 for a deal which gave it exclusive media rights to the cricket matches organized by BCCI.
“While Star India has marquee properties in all its leagues and a control on Indian cricket tournaments, Sony has clout with the IPL and WWE in its portfolio. Overall, Star India had a better portfolio but now Sony will be able to provide more competition to Star since the market is not fragmented anymore,” said Blah.
A top official from another leading sports broadcaster, who declined to be named, said the deal will not make any difference to Star India.
“This doesn’t change anything for Star India. TEN Sports existed earlier and it will continue to, and Sony has been in the business of sports broadcasting earlier as well,” the official said.
Sony netted Rs.1,200 crore in advertising revenue in the recently concluded ninth season of Indian Premiere League in May, according to a PTI report on 5 June. The broadcaster had sales of Rs.800 crore during IPL 2015.