 "ZEEL refutes $940 million Disney Star claim over ICC TV rights deal")
Star India on Monday filed a statement of case seeking $940 million damages from Zee Entertainment Enterprises (ZEEL) over the terminated ICC TV rights deal, the latter said in a stock exchange filing.
Star India, now Disney Star, is seeking damages in the London Court of International Arbitration (LCIA), said ZEEL in the exchange filing.
This comes after ZEEL failed the payment deadlines of the $1.4 billion deal with Star India.
The Mumbai-based broadcaster had cited that it was not in a position to pay after it failed to pay its first $200 million payment.
Earlier, ZEEL had disclosed that Star India is pursuing damages in the ongoing arbitration process, which was yet to be quantified.
“The company categorically refuted all claims and assertions made by Star, including its claims for damages,” said ZEEL in a statement.
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“The arbitration is at its initial stage and the LCIA Arbitral Tribunal is yet to determine if the company is liable in any manner. The company will, on merits, strongly contest all unfounded claims by Star and reserves all its rights,” it added.
ZEEL’s stock fell 1.35 per cent to Rs 131.20 a piece on NSE.
The analysts that Business Standard spoke to highlighted that the $940 million damage claim is a huge amount. This is especially considering the company's current financial restructuring efforts.
They agreed that it is too early to know investor sentiment, as there has been no major decline in Zee's share price. However, the absence of any positive development poses a threat.
In March 2024, this lawsuit was initiated, and later, Star India presented its statement of case to the LCIA Arbitral Tribunal.
Star India has asked for an official confirmation that the agreement was validly terminated. And, it is seeking damages to be determined according to the tribunal's ultimate decision, the exchange filing said.
The original agreement between ZEEL and Star India was signed on August 26, 2022.
The agreement had ZEEL as a key player in broadcasting major ICC events, including the ICC Men’s T20 World Cup and ICC Men’s Cricket World Cup.
Under this, Star India would have sub-licensed the linear TV rights for the ICC Men’s tournaments to ZEEL for the 2024-27 cycle. This was later dissolved in August 2024 citing allegations of contractual breaches.
ZEEL claims that Star India violated the agreement and sought repayment of approximately $8 million, as stated in its earnings report for the December quarter.
Earlier, it had been reported that Disney Star is seeking to renegotiate the media rights deal with ICC for the 2024-2027 upcycle.
This comes after a loss in its advertising revenue from the recently concluded ICC Men’s T 20 World Cup held in the US and West Indies.
Also, last month ZEEL and Sony Pictures Network India together resolved and withdrew all their claims against each other over their failed $10 billion merger.
ZEEL has also raised funds and cut workforce to achieve better margins by 2026.
Recap sequence
August 2022 ZEEL, Star India sign agreement to sublicense ICC TV rights for 4 years
January 2024 ZEEL fails to pay an initial $200 million citing it's in no position to pay
March 2024 Star India initiates arbitration proceedings against Zee before an arbitration court
June 2024 Star India terminates deal with Zee Entertainment, citing a breach of contract