Zee Entertainment has refuted all claims by Star India Private Limited, including the $940 million, or nearly Rs 8,000 crore sought in damages, after Star filed a 'Statement of Case' before London Court of International Arbitration (LCIA), in which it declared termination of the alliance agreement.
"The Company categorically refutes all claims and assertions made by Star including its claims for damages. The arbitration is at its initial stage and the LCIA Arbitral Tribunal is yet to determine if the Company is liable in any manner," said Zee Entertainment.
Shares of ZEE are lower by 0.5 percent at 12:30pm.
ZEE said it will 'strongly contest' all claims by Star, calling them 'unfounded'. The media company added that the arbitration is at an 'initial stage' and the Tribunal is yet to determine liability in any manner.
In March 2024, Star India had initiated arbitration proceedings against Zee over the alliance agreement entered between both entities in August 2022.
The 2022 Alliance Agreement between Zee Entertainment and Star India was for a sub-license of TV broadcasting rights of ICC Men's and Under-19 international matches between 2024-2027.
Earlier this year, Zee Entertainment had alleged that Star India has not acted in accordance with the alliance agreement over sharing of TV broadcast rights of ICC cricket matches, and sought a refund.
Moneycontrol had reported in February that Star India had sent letters to Zee alleging breach of agreement over non-payment of rights fee aggregating to $203.56 million or Rs 1,693.42 crore. On the other hand, Zee said that Star failed to obtain necessary approvals, breached the Alliance Agreement and defaulted of the terms, resulting in the repudiation of the contract.
Analysts had pointed out that the broadcast deal could result in annual losses of Rs 1,520 crore in FY25 for Zee due to high content cost, lower sports ad revenue and availability of free cricket content on streaming platform.
The London Court of International Arbitration (LCIA) is a private, not-for-profit organization aimed at resolving commercial disputes through arbitration and other proceedings.
While Sports broadcasting may no longer be a focus area for ZEE, the media entity is not ruling it out completely, Ashish Sehgal, Head – Integrated Advertisement Revenue, Zee Entertainment Enterprises Ltd (ZEEL), had recently told Moneycontrol.
"During the merger, there were some things which we were planning but now (Punit) Goenka has already mentioned that sports as a strategy is not there for us. But whether we will be completely out of sports, it depends on how we look at any event. We are not saying no to sports. At least I'm not saying no to sports," Sehgal said.
ZEE had reported a declined of 3.6% YoY in domestic advertising revenue for the June quarter, impacted by cricket and general elections.
In its FY23 annual report, ZEE said it was betting on the return to sports broadcasting as a strategic decision to harness 'growth opportunities', and turn them into value proposition. Cricket commanded a staggering 75% share of Indian viewership, ZEE said.
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