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Zee Well Placed After Ten Sale

Zee will have plenty of fresh capital to bolster entertainment revenues at home and abroad, following its all-cash sale of Ten Sports to Sony for US$385 million.

Within India, investment in digital and a double-down on regional markets could be key for Zee’s future growth.

Ten generated US$120 million in combined losses over the past five years, with a further US$15 million loss anticipated for FYE March 2017. Zee had acquired the asset in various stages for US$105 million.

Run rate revenues are trending at US$90-95 million per year.

For Sony, Ten deepens its sports portfolio as executives decide whether to bid aggressively to retain TV rights and gain digital rights for the valuable Indian Premier League (IPL) cricket franchise.

The broadcaster is working towards a target of ~40% of revenue coming from sports.

Sony India CEO NP Singh has indicated that the Ten deal was in the works for some time, and is in line with a strategy to deepen investment across sports and entertainment.

Discovery was also close to acquiring Ten in 2016.

Ten has inked deals with cricket boards in South Africa, Sri Lanka, West Indies and Zimbabwe as well as golf, football and tennis rights-holders.

Ten’s football properties include the Uefa Champions League while its golf assets include European and Asian Tour events, the Ryder Cup and the US PGA Championship.

Ten operates five channels in India and two across other markets, including the Middle East, Hong Kong and Singapore.

The sale will likely take five months to complete and prevents Zee from re-entering the sports business for four years.

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