Subhash Chandra-promoted Zee Telefilms has acquired a 50% stake in Dubai-based television channel, Ten Sports, for around Rs 256 crore.
NEW DELHI: Subhash Chandra-promoted Zee Telefilms has acquired a 50% stake in Dubai-based television channel, Ten Sports, for around Rs 256 crore. The enterprise value of Ten Sports is estimated at Rs 513 crore. The deal between the two broadcasters was announced on Monday.
The possibility of a merger is not being ruled out. It is learnt that Zee may consider hiking its stake in the channel, promoted by Abdul Rehman Bukhatir, only after 2009. For now, Zee and Ten Sports will be run as two separate entities, though they would share content. On the acquisition, Zee chairman Subhash Chandra said, “This is an important step towards consolidation in the media industry.”
Recently, Sony Entertainment Television (SET), which was keen on acquiring a 50% stake in Ten Sports, had called off the buyout talks over differences in ‘valuation’ figures.
Following the deal between Zee and Ten Sports, there will be four directors on the Ten Sports board from the Zee group. They are Deepak Jain, Jawahar Goel, Punit Goenka and Yogesh Radhakrishnan.
Three directors from Taj TV, which runs Ten Sports, will be retained on the board. Chris McDonald will continue to be the CEO of Ten Sports.
Himanshu Mody, business head of Zee Sports, told DNA Money, “It is a great strategic move for Zee.” The deal with a leading broadcaster like Ten Sports would help “us expand our sports bouquet”, Mody pointed out. According to him, “it emphasises Zee’s seriousness as a sports broadcaster.” On the possibility of a merger, he said, “It’s the logical next step.”
Sports properties of Ten Sports include telecast rights of the matches of the Pakistan Cricket Board, Sri Lanka Cricket Board, and the West Indies Cricket Board. In addition, it has the rights to UEFA Champions League, WWE, US Open and Hockey World Cup. Zee, on the other hand, has BCCI neutral venue rights, besides rights to Indian football, Davis Cup and WTA.
Interestingly, both Zee Sports and Ten Sports have put in their bids for telecast rights of matches to be organised by the International Cricket Council (ICC) for eight years starting 2007. ESPN-Star Sports has also bid for the same. The financial bids are expected to be finalised this week, after which the name of the rights holder would be announced, perhaps on Friday, in Dubai.
Ten Sports was launched in 2002 and is available in 50 million cable and satellite households across the world. After the deal with Zee, Ten Sports CEO Chris McDonald said, “As has been reported on many occasions, we had been in discussions with various potential strategic investors.”
“Without question, Zee, Asia’s premier media concern, is the right choice for us. They bring strength to our business,” he said.
Following Zee’s stake acquisition in Ten Sports, the financial statements of Taj Television would be consolidated in Zee’s books. Taj TV is expected to have an average annual revenue of $50 million for the next three financial years, Zee said in a statement.
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