New Delhi: Walt Disney-owned Star India has initiated legal proceedings seeking damages amounting to USD 940 million from Zee Entertainment Enterprises for allegedly failing to honor a USD 1.5 billion International Cricket Council (ICC) TV rights agreement. This move comes in the midst of a high-stakes arbitration battle between the two media giants.
The details emerged through a regulatory filing by Zee on September 16, where it disclosed that Star had filed a Statement of Case before the London Court of International Arbitration (LCIA). Star’s claim, as per the filing, quantifies the damages sought, including costs, expenses, and interest, up until August 31, 2024. The claim stems from a TV rights sub-licensing deal between the two companies.
In response, Zee has categorically denied any wrongdoing. The company noted that the arbitration is still in its initial phase, and the LCIA Arbitral Tribunal has yet to determine Zee’s liability. “The company will, on merits, strongly contest all unfounded claims by Star and reserves all its rights,” said Zee in its regulatory statement.
Star’s Merger with Viacom18 Adds Complexity
This legal dispute comes at a critical time for Star India, which is in the process of merging with Viacom18, a Reliance Industries Limited (RIL)-owned company. The merger, once complete, will create India’s largest media and entertainment conglomerate, valued at approximately USD 8.5 billion.
The merged entity, which will be primarily controlled by RIL, is expected to take over Star’s ongoing arbitration proceedings against Zee once the merger is formalized. The National Company Law Tribunal (NCLT) and the Competition Commission of India (CCI) have already greenlighted the merger.
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Valuation Dip and Financial Strain
One of the key drivers behind this arbitration is the significant financial strain Star India has experienced. The ICC TV rights deal, worth USD 3 billion for the 2024-2027 period, was seen as a major investment, but its partnership with Zee unraveled, leading to a valuation dip for Star. Once the bigger player in the merger talks, Star was recently valued at just USD 3 billion—lower than Viacom18, which carried a valuation of USD 4 billion. This drop in valuation is directly tied to unresolved liabilities, including the ICC TV rights deal.
As part of the merger agreement, Reliance Industries is set to inject USD 1.5 billion into the newly formed media entity.
ICC TV Rights: The Root of the Dispute
The dispute began in 2022, when Star India sublicensed the ICC TV rights to Zee under an alliance agreement signed on August 26. However, Zee informed Star that it was unable to proceed with the agreement due to several unmet conditions, including the submission of financial commitments, provision of a bank guarantee, and final approval from the ICC for the sub-licensing deal.
In response, Star terminated its alliance with Zee on June 20, 2024, and filed for arbitration before the LCIA shortly after. The damages sought by Star, totaling USD 940 million, include costs and interest.
