Zee acquires 50 pc stake in Ten Sports
Zee Telefilms has acquired 50 per cent stake in Taj TV, which owns the Dubai-based Ten Sports television channel; the investment is based on an enterprise value of $114 million (Rs 513 crore), said a statement from the company.
"Our investment is around Rs 250 crore," said an official with Zee Telefilms.
Zee will have controlling stake in Taj TV, the new board of which will now comprise seven members with four from the Zee Group, the official said.
Zee Sports International Mauritius, a wholly owned subsidiary of Asia Today Ltd, Mauritius, a subsidiary of Zee, will buy 50 per cent stake in Taj TV from its existing shareholders, said the company statement.
Zee will also acquire 50 per cent stake in the Mumbai-based Taj Television India Pvt Ltd, a distribution arm of Ten Sports in India, it added.
Zee Telefilms’ sports channel, Zee Sports was launched in 2004 and is a relatively new entrant, while Ten Sports has been around in India since 2002.
Ten Sports is beamed to nearly 50 million cable/satellite households worldwide.
The channel broadcasts cricket from Sharjah, the West Indies, Pakistan, Sri Lanka and Morocco throughout the Indian sub-continent and Asia, as well as in Europe and West Asia.
Ten Sports also owns the exclusive rights for the WWE, the UEFA Champions League, US Open tennis and World Cup hockey.
The acquisition gives Zee Sports a stronger presence in cricket.
Currently Zee Sports only has telecast rights from the Board of Control for Cricket in India for certain matches.
(It also has 10-year telecast rights for the all-India Football Federation matches.)
Zee Sports recently bid for rights to the International Cricket Council (ICC) World Cups and tournaments for the next eight years.
If it wins the bid, the presence of Ten Sports in its fold would augment its cricket broadcast revenues enormously, according to analysts.
"This acquisition is an important step from Zee towards consolidation in the media industry," said a statement quoting Mr Subhash Chandra, Chairman of Zee Telefilms.
"The acquisition of a stake in Ten Sports not only gives us a strong foothold in the arena of sports broadcasting across Asia, but strengthens our operations in West Asia."
The possibility of merger of the two sports channels is not ruled out, according to senior Zee Sports officials.
"The addition of Ten Sports gives us significant strength, enabling further effective exploitation of all our sports properties," said Mr Himanshu Mody, Business Head of Zee Sports.
"We should be able to run the two channels at much better economies of scale."
The alliance of Zee and Ten Sports is also expected to further consolidate the sports channels sector in India.
Mr Nikhil Vora, Vice-President at SSKI Securities, said: "Zee is going to become a serious player among the sports channels while Ten Sports is expected to carry on its existing legacy."
Besides, the consolidation would bring about a price correction in the burgeoning rights fees for various sports properties, analysts said.
The Zee Telefilms scrip gained 3.33 per cent on the BSE on Monday to close at Rs 341.65.
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