Disney-Star sub-licenses ICC TV broadcast rights to Zee at $1.5 bn

In a first for the sports broadcasting industry in India, Disney-Star and Zee Entertainment on Tuesday said they had signed an exclusive licensing agreement for the television rights of the International Cricket Council (ICC) Men’s and Under-19 tournaments for 2024-27.

The deal comes days after Disney-Star retained the combined TV and digital rights for the ICC Men’s, Women’s and Under-19 tournaments for $3 billion till 2027 in a closed-loop auction involving the submission of bids in sealed envelopes.

Informed sources say the licensing deal has been valued at 50-55 per cent of the combined transaction value of $3 billion, that is, $1.5-1.6 billion. “Digital is a big area of focus for Disney worldwide and in India,” an executive in the know said. “An interested party for the television rights has allowed Disney to defray its costs as far as the acquisition of the combined ICC rights is concerned. At the same time, it is keeping the digital rights. This is a win-win for Disney,” the executive said. Disney-Star lost the digital rights to the Indian Premier League (IPL) for the 2023-27 media cycle during the e-auction in June despite going in for two rounds of bidding.

Viacom18 has bagged the rights for Rs 20,500 crore, while Disney-Star had retained the television rights for Rs 23,575 crore.

“By securing the IPL television broadcast rights for 2023-27 and now opting to retain only the digital rights for ICC tournaments for 2024-27, we have in place a balanced and robust cricket offering for our audiences across linear and digital,” said K Madhavan, country manager and president, Disney-Star.

For Zee, on the other hand, getting access to the television feed of the ICC Men’s and Under-19 tournaments will help build its sports broadcasting base, six years after its re-entry into the arena, persons in the know said.

In May, in its first transaction to mark its re-entry into sports broadcasting, Zee bagged the global rights to air the UAE T20 League for Rs 800-900 crore.

Contours of the deal

• ICC media rights, including TV and digital, acquired by Disney-Star for $3 bn till 2027
• TV rights (for Men's and U-19 matches) licensed to Zee for $1.5-1.6 bn; digital rights stay with Disney-Star
• First licensing deal in Indian sports

 
What Disney-Star gets

• Focus on digital after losing IPL digital rights for 2023-27 cycle to Viacom18 in June 

What Zee gets

• A sports broadcasting base six years after re-entering sector
• In May, Zee had acquired global broadcast rights for UAE T20 League for Rs 800-900 crore

Zee is merging with Sony and the two broadcasters are said to be on the same page with regard to the licensing transaction.

“The association with Disney-Star reflects our sharp, strategic vision for the sports business in India,” said Punit Goenka, managing director and chief executive officer, Zee Entertainment.

Media experts say the deal could spur more such transactions.

“This is an industry-first and could set off a trend,” said Karan Taurani, senior vice-president, research, Elara Capital.

“Digital is a growing space vis-a-vis linear television. In the next five years the shift from television to digital will be higher as viewers from smaller towns and cities begin to migrate to digital services, in part because of affordable data tariffs and the penetration of smartphones,” he said.

In its outlook on the Indian media and entertainment (M&E) market in June, PwC said the next few years would see the emergence of new revenue models in digital with the roll-out of 5G service.

“We will see a different profile of M&E businesses emerging with 5G,” said Rajib Basu, partner & leader, entertainment and media, PwC India.

Disney-Star appears to be preparing for this new round of action by shifting its focus to the digital medium.