 "Zee")
Zee Entertainment Enterprises has lodged allegations against Star India, a subsidiary of Walt Disney, accusing them of breaching the ICC TV rights agreement and demanding a refund of Rs 68.54 crore paid under the deal. In its Q3 financial statement, filed with the exchanges, Zee stated that it had accrued Rs 72.1 crore for bank guarantee commission and interest expenses as per the agreement terms.
Star India, through legal channels, accused Zee of violating the ICC TV rights agreement by failing to make the first instalment payment of $203.5 million, and the bank guaranteed a commission deposit of around Rs 17 crore.
However, Zee contends that Star's inability to secure necessary approvals and execute required documents constitutes a breach of the agreement conditions, rendering it null and void.
The filing read, "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 approval, execution of necessary documentation and agreements. The management also believe that Star has breached the Alliance agreement and is in default of terms thereof and consequently, the contract stands repudiated."
Zee further stated that Star has been notified of this and been requested to refund Rs 68.54 crore. Zee contends that the company "has strong and valid grounds to defend any claim".
The agreement between Zee and Star, signed on August 26, 2022, outlined the terms for sub-licensing ICC TV rights to Zee for men's and U-19 events until 2027. Notably, Star India had acquired the ICC media rights for $3 billion and sub-licensed them to Zee for $1.5 billion.
This development comes amidst Zee's failed merger with Sony Group's India unit, Culver Max Entertainment, and Star's impending merger with Viacom18, a subsidiary of Reliance Industries.
Reliance reportedly reduced Star India's valuation by up to $2 billion due to anticipated losses from the ICC contract over the next four years, according to a report by the Economic Times. Disney acquired Star for over $15 billion as part of its acquisition of 21st Century Fox in 2019.
