Zee revamps business strategy post-Sony merger fallout: Report

After the failed ICC TV deal, it also demands a refund of Rs 69 crore from Star.

According to a report on ET, Zee Entertainment Enterprises is re-evaluating its business to recover profits after its failed merger with Sony Pictures Entertainment. The company aims to improve quality, lower expenses, and minimise business overlaps. It will increase synergies and optimise spending on marketing, content, and technology.

Zee will provide advertisers with more value and explore different ways to monetise their content. The company aims to achieve an 18% to 20% EBITDA margin by FY26, with a modest rebound in margins expected in the second part of FY25.

In the third quarter of FY24, operating revenue was Rs 2,045.7 crore, while net profit decreased by 6.4% to Rs 53.4 crore. Zee and Sony Pictures Entertainment's merger agreement was terminated, and it has accused Disney Star of violating the ICC TV rights agreement. Zee has sought a refund of Rs 69 crore paid as part of the agreement, but does not anticipate any significant adverse impact from the contract repudiation.

Zee has accused Walt Disney-owned Star India of breaking the terms of the ICC TV rights agreement. According to the company, the cooperation arrangement was halted because Star India neglected to execute the required documents and secure the relevant approvals.

Zee does not foresee any negative effects from the contract repudiation, but Star India's valuation has been negatively impacted and is projected to have an effect on future profits due to the company's inability to comply with the terms of the ICC TV arrangement.