Zee-Sony merger to come into effect in 8-10 months; sports bidding will be key

The merger between Zee Entertainment and Sony Pictures Networks India (SPNI) that was announced on December 22 will take at least 8 months to close.

Punit Goenka, who will lead the combined company as its Managing Director and CEO, said that the entire merger process along with approvals will take eight to 10 months.

"While this is a positive step, there are multiple stages in bringing the combined company into existence. As for the process, we will move to the next step that involves all the necessary regulatory and shareholder approvals," he said during a conference call.

Goenka added that with the merger, the brand Zee will become part of the new entity and the new merged company will decide which brands to keep and for how long.

Even on the streaming side, Goenka said that the two over the top (OTT) platforms ZEE5 and SonyLIV will continue to run their businesses independently. "We cannot come together until the merger process is completed," he said.

Goenka reiterated the importance of the sports genre for both Zee and the merged entity.

"We will be considering bidding for sports rights whether IPL or other property as we have taken a conscious decision to enter sports. We will be aggressive in sports acquisitions independently as well as (with) the merged company but keeping prudence in mind," said Goenka.

After the merger, Zee will get access to Sony's 10 sports channels which includes the recently launched regional channel Ten 4. Other sports channels include Sony Six, Sony Ten 1, Sony Ten 2, and Sony 3 along with the HD versions of all these channels.

"Sony will infuse USD 1.6 billion cash which will enable the merged entity to accelerate its digital platform and significantly invest in premium content including sports," Goenka had said during an investor conference call held on September 22.

According to analysts, sports will play a pivotal role in the overall scheme of things for the combined entity and that the merged company will have the financial muscle to bid for some of the marquee properties like IPL, other cricketing properties, Pro Kabaddi League which are currently being aired on Star & Disney and will come up for renewal.

The acquisition of these properties would be a game-changer, said Vivek Menon, Co-founder of NV Capital, a media and entertainment financing group.