In a development that adds to Zee Entertainment Enterprises Ltd.’s challenges, the media firm has reportedly failed to meet the deadline for a $200 million payment to Walt Disney Co.’s India unit for TV rights of cricket matches.
Sources reveal that Zee cited a cash crunch for not making the installment due early January, raising concerns about possible legal ramifications. The missed payment comes as Zee grapples with the aftermath of a potential collapse of its mega-merger with Sony Group Corp.
Disney, the recipient of the payment, has sought clarification from Zee regarding the skipped installment. The $200 million tranche is part of the more than $1.4 billion Zee had agreed to pay for a license agreement signed in August 2022. Zee, reportedly, has not provided bank guarantees as outlined in the contract.
The defaulting on payment to Disney adds complexity to Zee’s situation, coinciding with uncertainties around the Sony Group merger. Bloomberg News had earlier reported Sony’s intentions to send a deal termination notice to Zee, a move Zee stated it was working towards avoiding.
In August 2022, Disney Star and Zee entered a pact for the exclusive TV rights of International Cricket Council men’s matches in India until 2027. While Disney’s streaming platform retained digital rights, Zee viewed this agreement as crucial to maintaining viewership and attracting advertisers in the cricket-crazed nation of over 1.4 billion people.
Following this development, Zee’s shares experienced a significant drop, plunging as much as 14% before recovering slightly. As of 2:35 pm in Mumbai, Zee’s shares were trading 7.7% lower.
