Zee Entertainment Enterprises has decided to sell its sports business (TEN Sports channels) to Sony Pictures Networks India and its affiliates for $385 million.
The sale will help Zee exit its loss-making sports broadcasting business, which contributed ₹631 crore (about 11 per cent) to its consolidated revenue in 2015-16.
The sports business incurred a net loss of ₹37 crore, against a profit of ₹1,027 crore from consolidated operations during the year.
It was in 2006 that Zee acquired a 50 per cent stake (raised subsequently) each in Taj TV, Mauritius, which owns TEN Sports channels, and in Taj Television India, the distribution arm of TEN Sports in India.
A report from Ambit Capital shows that the sports business has incurred losses at the operating level in all years except one since 2005-06.
This is in sharp contrast to the company’s profitable general entertainment channel (GEC) broadcasting business.
Zee has a strong foothold in the Hindi and regional languages GEC space, which forms a chunk of the TV viewership base. Even as it is exiting the sports genre, it is looking at expanding its presence in the regional GEC space (Tamil Nadu, for instance). In January, it acquired Sarthak TV, a leading GEC in Odisha.
TEN Sports has the broadcast rights to the events organised by the cricketing boards of five countries, including South Africa, West Indies and Pakistan, as also to other non-cricket events such as wrestling, football and tennis.
But, it does not have the broadcasting rights for some lucrative events such as the cricket matches organised by the Board of Control for Cricket in India, thereby impacting the company’s subscription revenue from this business.