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ZEEL guides sports losses to be over Rs 100 crore in FY17

MUMBAI: Zee Entertainment Enterprises Ltd (ZEEL) has guided for sports losses to be north of Rs 100 crore (Rs 1 billion) this financial year due to the rise in content costs with the return of India cricket on Ten Sports.

India will tour Zimbabwe and the West Indies in the current fiscal, the broadcast telecast rights of which are with Ten Sports. Though this will lead to a growth in revenues, rights fee payouts will be higher.

The sports business of ZEEL is housed in Taj Television. The wholly owned subsidiary owns and operates sports channels comprising Ten 1, Ten 2, Ten 3, Ten 1 HD and Ten Golf HD.

In FY16, ZEEL posted EBITDA loss of Rs 34.9 crore (Rs 349 million) from its sports segment compared to a loss of Rs 26.6 crore (Rs 266 million) a year ago. When live telecast of any major India cricket is absent from ZEEL’s sports network, the company manages to restrict its operating loss from the sports business.

Revenue from sports stood flat at Rs 631.2 crore in FY16 from Rs 631.3 crore (Rs 6.31 billion) in the earlier year.

Cost was at Rs 666.1 crore (Rs 6.66 billion) from Rs 657.9 crore (Rs 6.58 billion) in FY15.

Zee-sports-Fy15 and FY16

So, how has ZEEL’s sports business fared in Q4 of FY16? EBITDA loss from this segment stood at Rs 23.6 crore (Rs 236 million) compared to an operating profit of Rs 24.2 crore (Rs 242 million) in the prior-year quarter.

Revenue was at Rs 160.1 crore (Rs 1.6 billion), down from Rs 168 crore (Rs 1.68 billion) in Q4 of FY15. Cost stood at Rs 183.7 crore (Rs 1.84 billion) compared to Rs 143.8 crore.

The key properties during the quarter included telecast of South Africa vs England cricket series, UEFA Champions League round of 16, WTA Finals and WWE Royal Rumble.

Zee-sports-bizns-FY16

In the third quarter of FY16, operating loss from the sports business narrowed to Rs 15 crore (Rs 150 million) compared to a loss of Rs 27 crore (Rs 270 million) a year ago. Revenue stood at Rs 191.4 crore (Rs 1.91 billion), down from Rs 247.6 (Rs 2.48 crore) in Q3 of FY15. Cost was at Rs 206.4 crore (Rs 2.06 billion) from Rs 274.6 crore (Rs 2.75 billion).

In the first two quarters of FY16, ZEEL’s sports EBITDA was positive. In the April–September period, the sports business reported a small operating profit of Rs 3.7 crore (Rs 37 million).

Operating profit was at Rs 1.5 crore (Rs 15 million) in the first quarter of FY16 on a revenue of Rs 151.9 crore (Rs 1.52 billion), while cost stood at Rs 150.4 crore (Rs 1.5 billion). In the year-ago quarter, EBITDA was at Rs 1.2 crore (Rs 12 million) on a revenue of Rs 97.6 crore (Rs 976 million) and cost of Rs 96.4 crore (Rs 964 million).

In the second quarter of FY16, EBITDA was at Rs 2.2 crore (Rs 22 million) on a turnover of Rs 127.8 crore (Rs 1.28 billion) and cost of Rs 125.6 crore (Rs 1.26 billion). Compared to this, EBITDA loss in the second quarter of FY15 was at Rs 25 crore (Rs 250 million) on a revenue of Rs 118.1 crore (Rs 1.18 billion) and cost of Rs 143.1 crore (Rs 1.43 billion).

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