The contract between Zee Entertainment and Star India for the tv rights of ICC cricket might get terminated over the alleged breach of the Alliance Agreement between the 2 events, which they’d agreed upon for the sports activities rights deal.

Star India had despatched letters to Zee alleging a breach of the settlement in the course of the December quarter of FY24 on account of non-payment of dues for the rights regarding the first instalment of the rights price aggregating to $203.56 million or Rs 1,693.42 crore. This was together with the fee for financial institution assure fee and deposit curiosity aggregating Rs 17 crore and monetary commitments together with furnishing of company assure affirmation as said within the alliance settlement, Zee stated in a doc launched together with its Q3FY24 outcomes on February 13.

On the opposite hand, Zee stated that Star has not acted as per the settlement and has did not acquire obligatory approvals, and execution of obligatory documentation and agreements. The firm’s administration believes that Star by its conduct has breached the Alliance Agreement and is in default of the phrases thereof and consequently, the contract stands repudiated.

For the settlement relating to the ICC sports activities rights, Zee stated it has accrued Rs 72.14 crore for financial institution assure fee and curiosity bills as per the Alliance Agreement.

Zee stated that it has communicated to Star that the alliance settlement can’t be preceded and has sought a refund of Rs 68.54 crore paid to Star.

Case historical past

On August 26, 2022, Zee entered into an Alliance Agreement with Star India Private Limited wherein Star would grant sub-licensing rights regarding tv broadcasting rights of the International Cricket Council’s, (ICC) Men’s and Under 19 (U-19) world occasions for a interval of 4 years (ICC 2024-2027) on an unique foundation.

Disney Star acquired the ICC TV and digital rights for India from 2024 to 2027 for $3 billion. It retained the digital rights and sub-licensed the TV rights for the lads’s and Under-19 world occasions to Zee. The ICC Under-19 Men’s Cricket World Cup 2024, which will likely be held in South Africa from January 19 to February 11, would be the first event underneath the brand new media rights cycle.

While Zee stated that it had recognized this acquisition of strategic significance, analysts have identified that the deal would end in annual losses of Rs 1,520 crore in FY25 and past attributable to excessive content material value, decrease
sports activities advert income and cricket content material can be found free of charge on streaming platform.

In addition, after Sony terminated the merger, consultants had stated that Zee might not be capable to fulfil this dedication of the ICC sports activities rights take care of a money steadiness of Rs 600 crore.

While some authorized consultants have stated that Disney Star might not hesitate to take Zee to court docket if it fails to honour the settlement, Zee has stated that it has sturdy and legitimate grounds to defend any claims.