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ZEEL’s sports biz sans 1st phase of sale to Sony posts Rs 20 cr in Q1
MUMBAI: Zee Entertainment Enterprises Ltd (ZEEL), which was paid $330 million by Sony in the first phase of acquisition of the sports broadcasting business, is working towards the closure of the final phase of the transaction. This is expected to be completed within the next couple of months.
For the sports business which is part of the final phase of the 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 final 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, ZEEL further stated. There is thus no impact of sports business on ZEEL’s profits in the quarter ended 30 June 2017.
In the corresponding period a year ago, ZEEL had reported a revenue of Rs 170 crore. This was when ZEEL had not sold its sports business. In the quarter ended 30 June 2016, ZEEL’s sports business had posted advertising revenue of Rs 33.2 crore and subscription income of Rs 96.7 crore. Revenue from other sales & services stood at Rs 40.1 crore during this period.
Earlier this year, ZEEL said it had concluded the first phase of the transaction and was paid $330 million by Sony. The first phase of the transaction comprised the sale of ZEEL’s entire stake in Taj India and transfer of a major part of the sports broadcasting business of Taj Mauritius. ZEEL’s sports broadcasting business is housed under subsidiaries Taj TV Ltd, Mauritius (Taj Mauritius) and Taj Television (India) Pvt Ltd (Taj India).
The final phase of the transaction will be concluded subject to certain closing conditions.
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).
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 Rs 393 crore in FY17 while advertising income was Rs 107.2 crore. Other sales & 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.