Zee said to miss $200 million cricket fee deadline to Disney

Visuals from the India vs Australia World Cup final, played on Nov 19, 2023. Disney-Hotstar live-streamed the event (AFP image)

Zee Entertainment Enterprises Ltd. has missed a deadline to pay $200 million to Walt Disney Co.’s India unit for TV rights of cricket matches, according to people familiar with the matter, as the firm tries to preserve cash ahead of a likely collapse of its mega merger with Sony Group Corp.

The Mumbai-based media firm didn’t pay the installment due early January citing a cash crunch, the people said, asking not to be named as the information is not public. Disney has sought explanation from Zee on why the payment was skipped, they said, adding the tranche was part of the over $1.4 billion Zee agreed to pay for the license agreement signed in August 2022.

Defaulting on the payment to Disney unit poses fresh headaches for Zee, including possible legal wrangles, even as it deals with the fallout of a collapsing merger with the Sony Group. Zee hasn’t furnished bank guarantees for the sum that was to be paid as per the contract, according to one of the persons familiar.

Spokespersons for Zee and Disney didn’t immediately respond to requests for comment.

Bloomberg News reported Monday that Sony was planning to send a deal termination notice to Zee, which said Tuesday that it was still working toward closing the merger.

Disney Star had entered a pact with Zee in August 2022 to license exclusive TV rights for International Cricket Council men’s matches in India till 2027, while Disney’s streaming platform in the country retained digital rights for the property, according to an exchange filing then.

The Indian entertainment company was betting on the TV rights to retain its viewership and attract more advertisers in the cricket-crazy nation of more than 1.4 billion people.

Zee’s shares plunged as much as 14% on Tuesday before paring losses. It was trading 7.7% lower in Mumbai at 2:35 pm while the benchmark S&P BSE Sensex had advanced.