Zee Entertainment seeks refund of Rs 68 crore from Star after failed ICC TV deal

Zee Entertainment has sought a refund of over Rs 68 crore from Walt Disney-owned Star in relation to the television broadcasting rights of the International Cricket Council (ICC) Men’s and Under-19 events. It said that Star violated the terms of the ICC TV rights agreement. Zee said that it has accrued Rs 72 crore for bank guarantee commission and interest expenses for its share of bank guarantee and deposits as per the agreement.

In its Q3 financial statements, Zee said that in the quarter ended December 2023, Star sent letters to Zee through its legal counsel alleging breach of the agreement on account of non-payment of dues for the rights in relation to the first installment of the rights fee aggregating to $203.56 million along with payment of bank guarantee commission and interest expenses, amounting to Rs 17 crore.

Zee had entered into an agreement with Star India on August 26, 2022, according to which Star was to grant sub-licence rights to TV broadcasting of the ICC Men’s and U-19 events for a period of four years (2024-2027) on an exclusive basis. The agreement was subject to certain conditions, including financial commitments as well as the approval of ICC.

Zee, on the other hand, believes that Star is the one to breach the contract. “Based on the legal advice, the management believes that Star has not acted in accordance with the Alliance Agreement and has failed to obtain necessary approvals, execution of necessary documentation and agreements,” Zee stated.

The management believes that Star breached the contract, which is why it stands repudiated, Zee stated. The company has informed Star that the agreement cannot be proceeded with has sought refunds of Rs 68.54 crore.

Zee does not expect any material adverse impact with respect to this, it added.

Meanwhile, Zee Entertainment Enterprises reported that its Q3 net profit rose to Rs 58.5 crore from Rs 24.32 crore in Q3 FY23 after a pick-up in subscriptions offset a soft advertising environment. It reported a 15 per cent increase in income at Rs 223 crore as against Rs 194 crore in Q3 FY23.

Also read: Zee Entertainment Q3 results: Net profit rises 140% YoY, income increases 14.8%