Star India has terminated its sub-licensing agreement with Zee Entertainment Enterprises Ltd (ZEE) for the ICC Men’s tournaments from 2024-2027, citing a breach of contract. This development has sparked a dispute leading to arbitration proceedings, with Star India seeking damages.
Star India, owned by The Walt Disney Company, had granted ZEE the linear TV rights for the ICC Men’s tournaments for the 2024-2027 cycle. However, this partnership, established on August 26, 2022, has now been dissolved due to allegations of contractual breaches.
ZEE reported that Star India terminated the agreement on June 20, claiming a breach of contract. This agreement had positioned ZEE to broadcast major ICC events, including the ICC Men’s T20 World Cups and the ICC Men’s Cricket World Cup.
The termination followed Star India’s initiation of arbitration proceedings in March, where they sought either the specific performance of the agreement by ZEE or compensation for unquantified damages. Star India is now pursuing damages in the ongoing arbitration process, though the amount is yet to be determined.
“During the previous year, Star sent letters alleging a breach of the Alliance Agreement due to non-payment of dues for the first installment of the rights fee, amounting to $203.56 million (₹1,693.42 crore), along with payment for the bank guarantee commission and deposit interest totaling ₹17 crore, and financial commitments, including furnishing of corporate guarantees as stated in the agreement,” ZEE disclosed.
ZEE has countered, stating that Star India failed to act in accordance with the Alliance Agreement, not obtaining necessary approvals, and failing to execute required documentation and agreements. Based on legal advice, ZEE management believes Star’s actions amount to a repudiation of the contract. They have incurred ₹72.14 crore in bank guarantee commission and interest expenses and have requested a refund of ₹68.54 crore from Star India.
In August 2022, Star India secured the media rights for ICC tournaments for the 2024-2027 cycle for $3.03 billion and subsequently sub-licensed the linear TV rights to ZEE. This deal was strategic for ZEE, marking its return to the sports broadcasting sector after selling its Ten Sports network to Sony Pictures Networks India.
However, the execution of the sub-licensing agreement depended on fulfilling several conditions, including financial commitments, bank guarantees, corporate guarantees, and obtaining final approval from the ICC. ZEE’s ability to meet these commitments depended on its now-terminated merger with Sony, which would have provided over $1.5 billion in funding. Lacking this financial support, ZEE struggled to fulfill its obligations under the agreement.
ZEE’s management asserts, based on legal advice, that Star India failed to meet its obligations, including securing necessary approvals and completing required documentation, thereby breaching the agreement. The ZEE board continues to monitor the situation, maintaining that the company has strong grounds to defend itself in the arbitration process. They do not anticipate any significant adverse impact from this dispute and have not made any adjustments to their financial statements.
The terminated deal would have granted ZEE exclusive television rights to major ICC men’s events, including two ICC Men’s T20 World Cups (2024, 2026), the ICC Men’s Champions Trophy (2025), and the ICC Men’s Cricket World Cup (2027), as well as key ICC U-19 events.