Disney Star faces unusual fallout: A potential $2-billion downgrade by Reliance amidst Zee-Sony turmoil
Disney Star could, in terms of valuation, end up becoming an unusual and immediate victim of the aborted Sony-Zee merger.
Zee Entertainment Enterprises disputing its obligations to honour a $1.5-billion sub-licensing deal for the International Cricket Council (ICC) has raised the likelihood of an up to $2-billion downgrade of Disney Star by Reliance, on anticipated losses from the media rights agreement, people privy to the development told ET.
According to Zee, the ICC TV contract with Disney Star was contingent on successful completion of Zee's merger with Sony, said the people cited.
Disney Star disputes this claim.
A person familiar with discussions said Reliance Industries had been closely monitoring the Sony-Zee merger developments because the ICC TV deal was linked to it, with direct implications for Disney Star's valuations.
India's biggest company is seeking a merger of Disney Star with its own media businesses.
«Reliance had prepared two scenarios for Disney Star's valuations — one with ICC TV rights obligations, and the other without them, with a potential $2-billion downgrade if Disney Star also services the ICC TV deal, besides the digital rights,» said one of the people cited above.
Last week, the ICC confirmed that Disney Star will provide television and digital coverage of the ICC U19 Men's Cricket World Cup 2024 on Star Sports and Disney+ Hotstar, respectively.
Disney Star has also factored in the ICC television rights deal in its recently released tariffs by raising the bouquet price roughly 10%, despite losing the Board of Control for Cricket in India (BCCI) media rights.
Disney Star and Reliance declined to comment.
ET earlier reported that Reliance and Walt Disney had signed a non-binding
