The aftermath of the failed Sony-Zee merger has cast a shadow over Disney Star’s valuation, with reports suggesting a potential $2 billion downgrade by Reliance Industries amid the fallout from the Zee Entertainment Enterprises (ZEEL) dispute.
According to sources cited by ET, ZEEL’s disagreement over a $1.5 billion sub-licensing deal for the International Cricket Council (ICC) has raised concerns about Reliance’s stance on Disney Star’s valuation. ZEEL argued that its obligations to honor the ICC deal were dependent on the successful completion of the Zee-Sony merger, a claim disputed by Disney Star.
ET’s sources reveal that Reliance Industries is closely monitoring the developments of the Sony-Zee merger, with direct implications for Disney Star’s valuations linked to the ICC TV deal. The conglomerate has reportedly prepared two scenarios for Disney Star’s valuations—one with ICC TV rights obligations and the other without—with a potential $2 billion downgrade if Disney Star also services the ICC TV deal, in addition to the digital rights.
In August 2022, Disney Star had licensed its television broadcasting rights for all ICC men’s and under-19 (U-19) global events to ZEE Entertainment Enterprises for the period from 2024 to 2027. Despite losing the Board of Control for Cricket in India (BCCI) media rights, Disney Star incorporated the ICC television rights deal in its recent tariffs, leading to a roughly 10% increase in bouquet prices.
Reports also indicate ongoing talks between Reliance and Walt Disney regarding a potential merger of Viacom18 and Disney Star. If this deal materializes, it could create a media giant with combined revenues of approximately INR 25,000 crore.
“Disney Star had bid $3 billion for ICC media rights based on its understanding with Zee, whereas Viacom18 and Sony had offered bids worth $1.3-1.4 billion for the property. The losses from the property will be massive since they have overpaid by a huge margin,” states the report.
Amidst stiff competition from Reliance, Disney’s India business faces challenges, especially in the OTT market where Reliance’s JioCinema app holds IPL broadcasting rights, previously owned by Disney Hotstar. Additionally, Disney+ Hotstar ceased streaming HBO content in India last year in the face of intensified competition.
