With the new media rights cycle scheduled to commence next month, the $1.5 billion International Cricket Council (ICC) TV rights deal between Disney Star and Zee Entertainment Enterprises is on the brink of uncertainty.
Despite being announced in August 2022, the ICC TV deal is still pending conclusion, as Zee has yet to provide the necessary bank guarantees to Disney Star, as per sources cited in a report by the Economic Times.
Zee's FY23 annual report mentions that the procurement of ICC TV rights is contingent upon meeting specific prerequisites. These include fulfilling financial commitments, providing guarantees, and obtaining ICC approval for sub-licensing to the company.
Amid uncertainty surrounding the ICC TV deal, discussions between Walt Disney and Reliance Industries for a potential Star India and Viacom18 merger are underway. The upcoming ICC Under-19 Men's Cricket World Cup 2024 in South Africa marks the beginning of a new media rights cycle. Disney Star secured ICC TV and digital rights for India from 2024 to 2027 for $3 billion, sub-licensing TV rights for global events to Zee while retaining digital rights.
Disney Star outbid Sony Pictures Networks India (SPNI) and Viacom18 by securing the ICC's TV and digital rights for $3 billion, more than double the reported $1.3-1.4 billion offered by the competing firms. In the event of the ICC TV rights not materializing, Disney Star, the contractual party with the ICC, will bear the responsibility of fulfilling the entire $3 billion sports rights obligation over the next four years.
Media sector analysts foresee a drop in Disney Star's valuation due to projected losses from sports, with commitments totaling $6 billion between ICC media rights and Indian Premier League (IPL) TV rights. Recovery of these investments is expected to be challenging
