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ZEEL expects to receive $40 mn from 2nd phase of sports biz sale to Sony
MUMBAI: ZEEL is expecting to receive $40 million from the second phase of the sale of its sports business to Sony Pictures Networks India (SPNI), a top company official has said.
The company hopes to close the second phase of the deal, comprising the international business of Ten Sports Network, by August end or the beginning of September.
Earlier, ZEEL had received $330 million from the sale of the India part of Ten Sports.
In August 2016, Sony had signed an agreement with ZEEL to buy the latter’s sports broadcasting business for $385 million (Rs 2,578 crore). The sale transaction was agreed to be in two phases.
“It (second phase) is still under progress. We hope to complete the transaction by late August or September early this year. We have $40 million which is currently held up for that,” ZEEL managing director & CEO Punit Goenka told analysts recently in response to a question on the second phase of the sale of the sports business.
For the sports business which is part of the second phase of transaction, ZEEL reported revenue of Rs 20.1 crore in the quarter ended 30 June 2017. This included Rs 19.8 crore of advertising revenue and Rs 3 million of subscription income.
The revenue related to properties in international territories, which are part of second phase of the transaction. As part of the arrangement, the economic risk and reward of these properties lies with Sony Pictures, ZEEL said.
The revenue earned by these properties is passed on to Sony Pictures and is included in costs for the quarter. There is thus no impact of sports business on ZEEL’s profits in the quarter ended 30 June 2017, ZEEL said while announcing its fiscal first quarter financial performance.
ZEEL’s sports business posted a revenue of Rs 630.1 crore in FY17. In the previous two fiscal years, revenue was almost the same at Rs 631 crore. Subscription revenue from the sports segment was at Rs 393 crore in FY17, while advertising income was Rs 107.2 crore. Other sales and services amounted to Rs 130 crore.
ZEEL’s sports business incurred an expenditure of Rs 620.5 crore in the financial year ended 31 March 2017.
Recently, SPNI had rebranded Ten Sports channels to bring uniformity across its sports network. Ten 1, Ten 2, Ten 3, Ten 1 HD and Ten Gold HD have been re-branded Sony Ten 1, Sony Ten 2, Sony Ten 3, Sony Ten 1 HD and Sony Ten Golf HD. It had also launched HD versions of Sony Ten 2 and Sony Ten 3.