ZEE Entertainment has dismissed a £706 million compensation claim made by Disney-owned Star India regarding the termination of a cricket broadcasting agreement.
The claim is being pursued by Star India in the London Court of International Arbitration (LCIA).
“The arbitration is at its initial stage, and the LCIA Arbitral Tribunal is yet to decide whether the company is liable in any manner,” Zee stated.
In January, Zee exited a £1.05 billion deal with Star India, under which Star was to license television broadcasting rights for International Cricket Council events to Zee for four years.
Zee has alleged that Star India breached the agreement and sought repayment of about £6 million, as mentioned in its December-quarter earnings report.
Shares of Zee declined by as much as 1.6 per cent in Mumbai following the news.
“I wouldn’t expect a very large outgo from Zee’s end as far as this litigation is concerned,” Balaji Subramanian, a research analyst at IIFL Securities, said. However, he noted that it was difficult to determine if a clause was violated since the fine print of the deal was not made public.
Zee is a major player in India’s media and entertainment sector, which is seeing increased competition with Reliance Industries and the Adani Group expanding their interests.
The company has been raising funds, cutting jobs to reduce costs, and working on lowering losses in certain businesses, with a target to double its margins by 2026.
Last month, Zee and Sony settled all claims after their £7.5 billion merger was called off due to Zee’s inability to meet some financial terms of the agreement.
(Reuters)
