Era of Big Two in sports broadcasting as Sony acquires TEN Sports from ZEE

[Thakur]

Era of Big Two in sports broadcasting as Sony is set to swallow ZEEL-owned Ten Sports

Zee Entertainment Enterprises (ZEEL), the entertainment arm of Subhash Chandra's media empire, in a clarification to the exchanges confirmed that it was in advance level talks to sell its sports channel bouquet, which it operates under the Ten Sports brand.

Two weeks back, speculation about the fate of ZEEL's sports channels reached fever pitch after media reports of its sale to Sony Pictures Network India (SPN). Both the companies refused to comment on the matter then, and last week in an interview with Business Standard, MD and CEO of ZEEL, Punit Goenka called the reports speculative.

"The reports are all speculation. There is nothing of that sort happening. We are still working on sports and if you see the June 2016 quarter results, we have made a profit in sports. So, we are still focusing on turning that business around," he had said. He added that the company was open to strategic investments in the business, but nothing concrete had materialised on that front.



In response to the Bombay Stock Exchange's request for clarification on media reports about the sale of the Ten Sports bouquet for an estimated Rs 2,000 crore, the company said, "In order to maximise shareholder returns, the company keeps exploring various strategic options for entering into new business and/or exiting/restructuring existing businesses."


It added, "As part of the said ongoing process, we are at an advanced stage of discussion for sale of the sports business with potential buyer(s). However, owing to confidentiality provisions, the company is unable to comment on specific details or timelines." Appropriate announcements and disclosure will be made as and when any reporting event arise, it concluded.


The Ten Sports bouquet consists of five channels - Ten 1, 2, and 3 in standard definition and Ten HD and Ten Golf HD in high definition. The bouquet was acquired in 2010 by ZEEL when it bought UAE-based Taj Television, which now forms the television distribution arm of the Goenka-led network.



Zee Entertainment in talks to sell its sports bouquet | Business Standard

 

[Ramesh Dhiman]

RE: Zee Entertainment in talks to sell its sports bouquet

If Ten Sports business is in profit why Zee want to sell it. For Dish TV they have to pay more money for the subscription of the same Sony

 

[Thakur]

Era of Big Two in sports broadcasting as Sony is set to swallow ZEEL-owned Ten Sports

Sports broadcasting in India is set for a new era of Big Two as Sony Pictures Networks moves to ink its biggest acquisition deal in the Indian market.

The deal will see Sony swallow the sports broadcasting business of Zee Entertainment Enterprises Ltd (ZEEL), housed under Ten Sports.

ZEEL is expecting the deal size to be about Rs 2,500 crore (Rs 25 billion). It will mark the exit of ZEEL from sports broadcasting, paving the way for Star India and Sony to wrestle for cricket, soccer and other rights. Cash-strapped Neo Sports, owned by Nimbus, will continue to be an almost-invisible third player, staying out of the big game.

“ZEEL is looking to sell Ten Sports to Sony for around Rs 2,500 crore.

The deal is in the final lap. Some issues like the period for non-competition are being ironed out,” a source familiar with the development said.

The non-compete clause will keep Subhash Chandra-promoted ZEEL out of sports broadcasting.

The period being discussed is anywhere between three and six years, the source added.

ZEEL admitted on Monday to having advanced negotiations with potential buyers for its sports broadcasting business.

In a filing with the stock exchanges, the company, however, did not give any specific details or timeline due to confidentiality reasons.

Mumbai Mirror had first reported that Sony was on the verge of buying Ten Sports for around Rs 3,000 crore (Rs 30 billion).

The Economic Times then reported that Sony was close to acquiring Ten Sports for Rs 2,000 crore.

On Monday, CNBC-TV18 reported that the deal could be announced this week.

So, why is ZEEL looking to shut the door on sports broadcasting? The loss from sports business for FY17 is expected to be under Rs 100 crore (Rs 1 billion).

For a company that reported an operating profit of Rs 1,509.6 crore (Rs 15.1 billion) and a net profit of Rs 1,028.9 crore (Rs 10.29 billion) in FY16, the sports loss can be easily absorbed.

Why then let go of an asset that can have strategic value?

Read more at: Era of Big Two in sports broadcasting as Sony is set to swallow ZEEL-owned Ten Sports | TelevisionPost.com | TelevisionPost.com

 

[Thakur]

RE: Zee Entertainment in talks to sell its sports bouquet

 

[Pugazhbalaji]

RE: Zee Entertainment in talks to sell its sports bouquet

First Dish TV + Videocon d2h
now Sony + Ten

 

[DTH Fan]

RE: Era of Big Two in sports broadcasting as Sony is set to swallow ZEEL-owned Ten Sports

Now get ready to see big pathetic logos of Ten Sports with SONY written over them. :angry:

 

[Saj 007]

RE: Era of Big Two in sports broadcasting as Sony is set to swallow ZEEL-owned Ten Sports

Now get ready to see big pathetic logos of Ten Sports with SONY written over them. :angry:

Maybe they will create new logos..:tup

 

[shawl_who]

RE: Era of Big Two in sports broadcasting as Sony is set to swallow ZEEL-owned Ten Sports

That s gud news hya

 

[kumarvishwas]

RE: Era of Big Two in sports broadcasting as Sony is set to swallow ZEEL-owned Ten Sports

Good news,Sony knows how to manage content on Sports channel,I hope they revamp Ten Sports and launch more HF sports channels to challenge Star with backing of ESPN :nj

Only two broadcasters would bw left in Sports,so Viacom can also try to enter in this arena

 

[kirain]

Era of Big Two in sports broadcasting as Sony is set to swallow ZEEL-owned Ten Sports

MUMBAI: Sports broadcasting in India is set for a new era of Big Two as Sony Pictures Networks moves to ink its biggest acquisition deal in the Indian market. The deal will see Sony swallow the sports broadcasting business of Zee Entertainment Enterprises Ltd (ZEEL), housed under Ten Sports. ZEEL is expecting the deal size to be about Rs 2,500 crore (Rs 25 billion). This will mark the exit of ZEEL from sports broadcasting, paving the way for Star India and Sony to wrestle for cricket, soccer and other rights. Cash-strapped Neo Sports, owned by Nimbus, will continue to be an almost-invisible third player, staying out of the big game. “ZEEL is looking to sell Ten Sports to Sony for around Rs 2,500 crore. The deal is in the final lap. Some issues like the period for non-competition are being ironed out,” a source familiar with the development said. The non-compete clause will keep Subhash Chandra-promoted ZEEL out of sports broadcasting. The period being discussed is anywhere between three and six years, the source added. ZEEL admitted on Monday to having advanced negotiations with potential buyers for its sports broadcasting business. In a filing with the stock exchanges, the company, however, did not give any specific details or timeline due to confidentiality reasons. Mumbai Mirror had first reported that Sony was on the verge of buying Ten Sports for around Rs 3,000 crore (Rs 30 billion). The Economic Times then reported that Sony was close to acquiring Ten Sports for Rs 2,000 crore. On Monday, CNBC-TV18 reported that the deal could be announced this week. So, why is ZEEL looking to shut the door on sports broadcasting? The loss from sports business for FY17 is expected to be under Rs 100 crore (Rs 1 billion). For a company that reported an operating profit of Rs 1,509.6 crore (Rs 15.1 billion) and a net profit of Rs 1,028.9 crore (Rs 10.29 billion) in FY16, the sports loss can be easily absorbed. Why then let go of an asset that can have strategic value? Clearly, Chandra and son Punit Goenka, who is the MD and CEO of ZEEL, believe that rights fee of key sporting properties can only escalate. In a three-horse race, ZEEL had stayed away from making a run at the top and taken a conscious decision that it should keep annual sports loss below the Rs 100-crore range. Settled with rights to five cricket boards including South Africa, Sri Lanka, Pakistan, West Indies and Zimbabwe and WWE, it did not go after expensive bids. The focus was on retaining the rights that it had acquired. When Zee acquired 50% stake in Dubai-based Abdul Rahman Bukhatir’s Taj Group in 2006, it paid $57 million (Rs 2.6 billion in currency conversion of 2006). An additional 45% stake was purchased in 2010 for $44.145 million (Rs 2.1 billion). The balance 5% stake was bought in 2011 for Rs 0.2 billion. In the last 10 years, Zee’s cumulative EBITDA loss from the sports business stands at Rs 640 crore (Rs 6.4 billion). ZEEL’s top bosses realised that in a three-horse race, the shadow of these losses would persist. Without consolidation, the acquisition price of sporting properties would continue to rise and sports broadcasting might not turn profitable. Having bet big, Sony and Star India would not let their sports businesses go. So, why would Zee not abandon the space, the way ESPN did when in 2012 it sold its 50% stake in ESPN Star Sports to joint venture partner Star? In the era of the Big Three, rights fee of important sporting properties did not show any slowdown.  The period started in 2012 with Star India bagging the BCCI media rights till 2018 for a massive sum of Rs 3851 crore (Rs 38.51 billion) and then going on to buy out ESPN’s stake in the joint venture ESPN Star Sports. Sony launched sports channels and was in the market lapping up rights while Zee’s focus was to retain its key properties. During this period, only the value of the English Premier League (EPL), held by Star India, fell from $145 million for three years to about $99 million in the new rights cycle. For a brief moment, Discovery wanted to make an impact. After acquiring Eurosport, Discovery was looking to bring it to India. But realising that money couldn’t be made in sports broadcasting by a new player due to the way the market was currently structured, it decided to shelve its India launch plans. The Big Three thus went on to rule sports broadcasting in India, with Sony having the IPL rights, Star India the BCCI rights and Zee the rights to five cricket boards and WWE. Among the local leagues, the Pro Kabaddi League became a growing property under Star. The new cycle of the IPL rights, going to be fought fiercely between Sony and Star, is forcing the old order to crack. Even as speculation is growing that the IPL would go for more than double its earlier value, Sony is looking to consolidate the market by buying out Ten Sports. Besides providing scale, the deal will help Sony to hedge its risks against any possibility of losing the IPL. Sony Pictures Networks India CEO NP Singh’s main chase will be the IPL, which is the world’s most lucrative cricket property. He will want to have the IPL to be in the Sony locker again. Nobody expects it to come cheap, but if the price goes beyond rationality, Singh is prepared to let it go. Having the right of first refusal as well as the right to match the counter offer made by any rival, he can weigh all the factors before taking a final call on the IPL. “The acquisition of Ten Sports and the IPL rights can go together. Sony can play an aggressive game and possess both in a consolidated market. It all depends on how big the appetite is,” a media analyst said. The acquisition of Ten Sports will add to Sony’s growing strength in sports broadcasting, built over the years around the cash-rich IPL. Sony is now the home of international football and has basketball, fight sports and tennis as the other pillars of its sports business. With the Ten Sports’ channels coming under the Sony stable, subscription income will get added.Zee’s sports network has channels comprising Ten 1, Ten 2, Ten 3, Ten 1 HD and Ten Golf HD. “Sony will not just get the existing distribution income of Ten Sports, which should be around Rs 350 crore. There will also be a potential to up pay TV revenues due to consolidation and the combination of channels,” a senior executive of a broadcasting company said on condition of anonymity. While adding to the top line, Sony would expect Ten Sports’ losses to turn around due to benefits from consolidation. In FY16, ZEEL reported revenue of Rs 631.2 crore (Rs 6.31 billion) and EBITDA loss of Rs 34.9 crore (Rs 349 million) from its sports business. In soccer, the deal will help Sony add UEFA Champions League to its big-ticket properties like FIFA and UEFA. Ten Sports also has club TV programming like Barca TV, Chelsea TV and Arsenal TV. “We have over 900 matches spread around the year,” Ten Sports CEO Rajesh Sethi had told TelevisionPost.com in an earlier interaction. Sony, which has fight sport properties such as UFC and TNA, will get WWE from Ten Sports if the deal sails through. “By snapping up Ten Sports, Sony will get a solid year-round sports business, including the WWE. They will also gain scale,” said an analyst at a brokerage firm. A two-player market will also help tame content costs for both Star and Sony. “The consolidation of India into two sports rights buyers should reduce the inflation rate for content in the longer run. With competition practically reduced to two, the Indian sports market could be less emotional,” said the executive.

source: [url=http://www.televisionpost.com/television/era-of-big-two-in-sports-broadcasting-as-sony-is-set-to-swallow-zeel-owned-ten-sports/]Era of Big Two in sports broadcasting as Sony is set to swallow ZEEL-owned Ten Sports | TelevisionPost.com | TelevisionPost.com[/url]