Star India initiates arbitration proceedings against Zee over ICC TV deal dispute
Upstox
2 min read • Updated: March 15, 2024, 5:19 PM
Summary
Zee and Star India had inked an agreement in August 2022 to set out the basis on which Star would be willing to grant the sub-licence rights for TV broadcasting rights of the ICC men’s cricket events from 2024 to 2027. Star has alleged that Zee did not comply with the terms of the pact.
Zee Entertainment Enterprises Ltd on Friday, March 15, said Star India has initiated arbitration proceedings against the company for allegedly failing to comply with an agreement inked between them for the sharing of TV broadcasting rights of ICC men’s cricket matches.
Star has alleged that Zee is in “non-compliance” with the pact, and has asked the company to either adhere to the “specific performance of the alliance agreement” or, alternatively, “to pay damages, which are yet to be determined”, a regulatory filing said.
Zee and Star had signed an agreement on August 26, 2022, to set out the basis on which Star would be willing to grant the sub-license rights for the ICC men’s cricket events from 2024 to 2027.
In its exchange filing, Zee rejected the charges levelled by Star. “The company, based on its preliminary assessment of the application, and on legal advice received, disagrees with the averments made by Star,” the Punit Goenka-led media major said
An “appropriate response,” along with counterclaims, would be filed against Star’s request for arbitration, Zee added.
ICC TV deal dispute
Star India, which had secured the licence for the broadcast of ICC men’s cricket matches in India between 2024 and 2027, had signed the agreement with Zee to grant sub-licence rights to the company for the broadcast of matches during the three-year period.
The agreement between Star India and Zee was subject to certain compliances, such as submission of financial commitments and provisioning of bank guarantees.
Zee, while releasing its results for the quarter ended December 2023, said Star had issued letters to the company alleging non-payment of dues related to the rights fees aggregating to ₹1,693 crore. The company had also claimed that Star sought an additional ₹17 crore for the payment of bank guarantee commission, along with deposit interest.
Meanwhile, Zee claimed that it already communicated to Star about its decision to not proceed with the agreement and sought a refund of ₹68.5 crore, as per a disclosure made by the company last month.
Notably, the shares of Zee edged lower during the trading session on March 15. At the closing bell, the scrip was valued at ₹141.8 on the NSE, down 3.47% as against the previous day’s close.