IPL Media Rights – Sony Zee Merger: Sony Pictures Networks India Private Limited (SPNI) and Zee Entertainment Enterprises Ltd. (ZEEL) today announced that they have signed definitive agreements. The companies will now merge to create biggest & strongerst entertainment, sports, digital behemoth that India has ever seen. Especially the merger has potential to shake Disney Star Netwok’s hagemony over cricket rights – Follow all details on InsideSport.IN
Punit Goenka, managing director of Zee Entertainment last month had already declared that Goenka said the combined media giant will actively target sports content as part of it post-merger growth strategy.
“I certainly believe that consolidation is going to benefit the industry overall. Zee and Sony will form the largest media entertainment player in the country,” he said. “Our revenues on a standalone basis combined will be close to US$2 billion, and the capital growth that Sony is going to infuse in the merged entity will really give us the opportunity to invest in premium content and include sports.
“There is going to be a huge opportunity on both the digital and the linear side to create big-scale entertainment properties and acquire large IPs across genres.”
“Certainly sports will become an area of focus for the merged entity,” Goenka told delegates during the recently held event.
Sony Zee Merger: How it will shake up Indian Sports Rights & Sports Broadcasting Market?
It seems sport will be a key pillar of the merged media giant. Sony has been reported to be ready to invest US$1.58 billion in the merged business with Zee.
Zee sold off its Ten Sport division to Sony back in 2017, but with more spending power Zee-Sony will seek to challenge Disney’s Star as the leading player in the Indian market.
With the rights auction for Twenty20 cricket’s Indian Premier League (IPL) impending, the merged company is expected to make a serious bid as the Board of Control for Cricket in India (BCCI) seeks to double its current US$510 million per year rights fee.
When will IPL Media Rights Tender be released? The IPL Media Rights tender is likely to be released in January followed by the ICC Media Rights portfolio.
Both these rights are currently with Disney Star Network. But now with Sony-Zee Merger they will face very stiff competition from the merged entity.
IPL Media Rights: Sony Pictures & Zee Entertainment merge, Competition gets more tough for IPL & ICC Media Rights
Sony Zee Merger: The agreements follow the conclusion of an exclusive negotiation period during which ZEEL and SPNI conducted mutual due diligence.
After closing, the new combined company will be publicly listed in India. The closing of the transaction is subject to certain customary closing conditions, including regulatory, shareholder, and third-party approvals.
As part of the definitive agreements, the promoters (founders) of ZEEL have agreed to limit the equity that they may own in the combined company to 20% of its outstanding shares.
This construct does not provide the promoters (founders) of ZEEL any pre–emptive or other rights to acquire equity of the combined company from the Sony Group, the combined company or any other party. Any shares purchased by the promoters (founders) of ZEEL, must be in compliance with all applicable laws including any pricing guidelines.
Commenting on this development, Mr. Punit Goenka, MD & CEO, ZEE Entertainment Enterprises Ltd. said,
“It is a significant milestone for all of us, as two leading media & entertainment
companies join hands to drive the next era of entertainment filled with immense opportunities. The combined company will create a comprehensive entertainment business, enabling us to serve our consumers with wider content choices across platforms. I am immensely grateful to the teams at ZEEL, SPE and SPNI for their efforts, that swiftly led us to this point within the stipulated timelines. This merger presents a significant opportunity to jointly take the businesses to the next level and drive substantial growth in the global arena. I look forward to working with the guidance of the esteemed members of the combined company’s board to unlock the potential of this merger, and I wish N.P. Singh all the best in his new role at SPE”
MD & CEO, SPNI, Mr. N.P. Singh, added, “This merger will create a company that’s best in class and will redefine the contours of the media and entertainment industry. As a representative of SPE on the Board of the new merged company, it will be my endeavour to provide strategic guidance and support to the company’s operating team in achieving our vision. I am also excited at the opportunity of being appointed, Chairman, Sony Pictures India, to oversee SPE’s investments and craft a wider footprint for Sony in India.”
SPE was advised on this transaction by Morgan Stanley, KPMG Corporate Finance, and Shardul Amarchand Mangaldas & Co. ZEEL was advised by KPMG, JP Morgan, Trilegal and Boston Consulting Group.
