ZEE’s ICC sublicensing agreement is terminated by Star India, and damages are sought.
Citing a breach of contract, Star India has ended its sublicensing arrangement with ZEE for the ICC Men’s tournaments in 2024–2027.
ZEE asserts that Star breached the contract by failing to fulfill its responsibilities. Arbitration proceedings have resulted from the issue, and Star is requesting damages.
Zee Entertainment Enterprises Ltd. and Star India have terminated their exclusive partnership (ZEE). The network, which is owned by the Walt Disney Company, sublicensed to ZEE the linear TV rights to the ICC Men’s tournaments for the 2024–2027 cycle. This relationship has since been broken because of claims of breaching the contract.
Star India ended the partnership on June 20th, citing a violation of contract, ZEE reported on Wednesday. The initial contract, which was signed on August 26, 2022, had established ZEE as a prominent broadcaster of ICC competitions, such as the Men’s T20 and Men’s Cricket World Cups.
The termination comes after Star India filed for arbitration in March, requesting payment for unquantified damages or specific performance of the agreement by ZEE.
According to ZEE, Star India is currently seeking unquantifiable damages in the ongoing arbitration procedure.
ZEE disclosed that Star had written to it earlier in the year, accusing it of violating the Alliance Agreement by not paying the first installment of the rights fee, which was $203.56 million (₹1,693.42 crore), as well as the bank guarantee commission and deposit interest of ₹17 crore, and financial obligations, which included providing the corporate guarantee and confirmation as stipulated in the agreement.
The management feels that Star has not followed the terms of the Alliance Agreement and has not completed the required paperwork and agreements, nor has it gotten the required permissions, according to legal counsel,” the business continued.
Furthermore, ZEE has argued that Star India’s actions amount to a contract repudiation. The company has incurred ₹72.14 crore in commission and interest charges related to bank guarantees. It has asked Star India to reimburse it for ₹68.54 crore.
Star India paid $3.03 billion in August 2022 to get the broadcast rights to the ICC events for the 2024–2027 cycle. Later, it granted competitor network ZEE a sublicense for the linear TV rights.
ZEE made a calculated decision
To enter the sports broadcasting market with the first arrangement, which was its first since selling its Ten Sports network to Sony Pictures Networks India. However, according to ZEE’s declaration, the execution of the sub-licensing deal was contingent upon meeting a number of requirements, including making financial commitments, providing bank and corporate guarantees, and receiving final clearance from the ICC.
Those with knowledge of the situation claim that ZEE’s capacity to fulfill these obligations depended on the outcome of its now-canceled merger with Sony, which would have brought in more than $1.5 billion in finance. Without this monetary assistance, ZEE found it difficult to carry out its end of the bargain.
Based on legal advice, ZEE’s management claims that Star India violated the agreement by not fulfilling its responsibilities, which included obtaining the appropriate approvals and finishing the relevant paperwork.
ZEE’s board is keeping an eye on the matter and says the company has good reason to defend itself in the arbitration process. They have not made any changes to their financial accounts and do not anticipate this issue having a materially negative effect.
Under the terms of the now-canceled agreement, ZEE would have had exclusive broadcast rights to all major ICC men’s tournaments, including important ICC U-19 competitions and two ICC Men’s T20 World Cups (2024, 2026), the ICC Men’s Champions Trophy (2025), and the ICC Men’s Cricket World Cup (2027).
Citing a breach of contract
Star India has ended its sublicensing arrangement with ZEE for the ICC Men’s tournaments in 2024–2027. ZEE asserts that Star breached the contract by failing to fulfill its responsibilities. Arbitration proceedings have resulted from the issue, and Star is requesting damages.
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