Star India on Monday filed a statement of case seeking $940 million in damages against Zee Entertainment Enterprises (ZEEL) over the terminated ICC TV rights deal, the latter said in a stock exchange filing.
Star India, now Disney Star, is seeking damages in the London Court of International Arbitration (LCIA), said ZEEL in a stock exchange filing.
This comes after ZEEL missed the payment deadlines of the $1.4 billion deal with Star India. The Mumbai-based broadcaster had cited that it was not in a position to pay after it failed to meet its first $200 million payment.
Earlier, ZEEL had disclosed that Star India was pursuing damages in the ongoing arbitration process, which was yet to be quantified.
“The Company categorically refutes all claims and assertions made by Star including its claims for damages,” said ZEEL in a statement.
“The arbitration is at its initial stage and the LCIA Arbitral Tribunal is yet to determine if the Company is liable in any manner. The Company will, on merits, strongly contest all unfounded claims by Star and reserves all its rights,” the company added.
ZEEL’s stock fell 1.35 per cent to Rs 131.20 a piece on NSE.
Analysts that Business Standard spoke to, under the condition of anonymity, highlighted that the $940 million damages claim is significant, especially considering the company’s current financial restructuring efforts. They agreed that it is too early to gauge investor sentiment, as there has been no major decline in Zee’s share price, but the absence of any positive developments poses a threat.
In March 2024, this lawsuit was initiated, and later on, Star India presented its statement of case to the LCIA Arbitral Tribunal. Star India has asked for official confirmation that the agreement was validly terminated and is seeking damages to be determined according to the Tribunal’s ultimate decision, the exchange filing said.
The original agreement between ZEEL and Star India was signed on August 26, 2022. The agreement had ZEEL as a key player in broadcasting major ICC events, including the ICC Men’s T20 World Cups and the ICC Men’s Cricket World Cup. Under this, Star India would have sub-licensed the linear TV rights for the ICC Men’s tournaments to ZEEL for the 2024-27 cycle, which was later dissolved in August 2024, citing allegations of contractual breaches.
ZEEL claims that Star India violated the agreement and sought repayment of approximately $8 million, as stated in its earnings report for the December quarter.
Earlier, it had been reported that Disney Star is seeking to renegotiate the media rights deal with the ICC for the 2024-2027 cycle after a loss in its advertising revenue from the recently concluded ICC Men’s T20 World Cup held in the US and West Indies.
Additionally, last month, ZEEL and Sony Pictures Network India together resolved and withdrew all their claims against each other over their failed $10 billion merger. ZEEL has also raised funds and cut its workforce to achieve better margins by 2026.
First Published: Sep 18 2024 | 5:17 PM IST
