Zee Entertainment to review its entire business portfolio after breakup with Sony

Zee Entertainment Enterprises will look into its entire business portfolio after its much-awaited merger with Culver Max Entertainment failed. After releasing the December quarter results, Punit Goenka, managing director and chief executive, Zee, said the exercise will be conducted to identify businesses that would generate maximum value.

"We will be relooking at the entire portfolio of the business to see which businesses will add the maximum value to our portfolio. We need what to focus on, and what we do not need to focus on going forward," Goenka said after he was asked about his plans about the sports business.

Goenka added that Zee Entertainment will try to turn over a new leaf following its failed merger with the Sony Group Corporation’s Indian unit.

Zee Entertainment Enterprises on Tuesday reported a 140.74% year-on-year (YoY) jump in net profit at Rs 58.5 crore for the third quarter that ended December 31, 2023. At the operating level, EBITDA dipped 42.9% to Rs 209.2 crore in the October-December quarter of this fiscal over Rs 366 crore in the corresponding period in the previous fiscal.

Zee’s consolidated revenue declined 3.1 per cent to Rs 2,073 crore. It reported an advertising revenue of Rs 1027.4 crore, down 3.3 percent from Rs 1063.4 crore a year ago.

Goenka said there are three aspects of the turnaround plan: (a) frugality, (b) optimisation, and (c) sharp focus on quality content.

The company will implement steps to optimise spending and ROI. Focus will remain on quality over quantity, which might result in a lower number of original shows, he said.

Talking about company's growth, Goenka said as part of its target, the compant wants to achieve 18–20% Ebitda margin by FY26.

He predicted Ebitda margins will make a gradual recovery in the second half of FY25, with margins in the next financial year set to surpass that of FY24.

Last month, Culver Max Entertainment called off the merger agreement it had signed two years ago with Zee Entertainment Enterprises and sought a termination fee of $90 million on account of alleged breaches by the company.

In a note to the press, Culver Max Entertainment (CME) said that it had issued notice to ZEEL terminating the agreement dated December 22, 2021, to merge ZEEL and CME. “Although we engaged in good faith discussions to extend the end date under the merger cooperation agreement, we were unable to agree upon an extension by the January 21 deadline. After more than two years of negotiations, we are extremely disappointed that closing conditions to the merger were not satisfied by the end date.”

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