Zee says not aware of Disney Star's next steps on licence agreement

New Delhi, Jan 30: Zee Entertainment Enterprises has said that the company is not aware of, and cannot comment on, Star India Private Limited’s ('Disney Star') intentions or next steps with respect to the strategic licence agreement entered between the company and Disney Star.

“It appears that the captioned news item mentions Disney Star’s internal discussions/plans, which the company cannot remark on,” it said.

Zee had been asked to clarify on news item which said Disney Star mulling legal action against Zee for backing out from $1.4 billion deal.

Zee Entertainment Enterprises could see a hit from related penalty/legal proceedings due to battle with Sony over the non-compete fee, ongoing legal proceedings by various creditors of the Essel group (Axis Finance, IDBI Bank, etc) in dishonouring of contract with Disney, Elara Securities said in an earlier report.

Zee had also signed a contract with Disney for sub franchise of sports rights (ICC tournaments) in linear TV. We had estimated related annual losses of Rs 15.2 billion in FY25E and beyond, given hefty content cost, lower sports ad revenue and cricket content being available free on OTT, the report said.

Zee may now not fulfil this commitment (cash balance of mere Rs 6 billion, versus potential contractual obligation of Rs 40 billion per year) as it was entered into given its strategic-synergistic contiguity with Zee-Sony merger.