Zee Entertainment and SONY logos are displayed in this illustration taken.
| Photo Credit: Reuters
The collapse of a planned $10-billion merger with Sony’s unit has heaped pressure on Zee Entertainment, one of India’s most popular TV networks, to pursue deals with new partners or focus on areas such as digital entertainment to revive its fortunes.
A Zee-Sony India merger would have created a media powerhouse in the world’s most populous nation with 90-plus channels across sports, entertainment and news segments, which, India’s antitrust body at one time said could have “un-paralleled bargaining power” when backed by Sony’s global reach.
But after two years of deal talks, the Japanese company this week scrapped the deal saying the terms of its merger agreement were not met and is demanding $90 million in termination fees via arbitration. Zee denies any lapses and has started its counter-challenge legally.
Both Sony and Zee lost out as the merger could have helped them emerge stronger in India’s $28-billion media and entertainment space, especially when rivals — billionaire Mukesh Ambani’s Reliance and Walt Disney — are holding merger talks for their India media assets.
But the scrapping of the merger and the legal fight with Sony is seen jolting Zee more as it already faces a host of regulatory, business and financial challenges, according to analysts and three industry executives with direct knowledge of its thinking.
Zee’s advertising revenues fell to $488 million for the 2022-23 year from around $600 million five years ago.
Cash reserves dropped to $86 million from $116 million in that period.
