ZEEL set to complete 2nd phase of sale to Sony, to get $40m

ZEEL set to complete 2nd phase of sale to Sony, to get $40m- InsideSport

ZEEL is expecting to complete the second phase of sales business to Sony by the month end. The second phase, which involves companies international business under brand Ten Sports Network, will earn ZEEL richer by $ 40 million.

The Company had received $330 million for the domestic part of the business, which was transferred to Sony Pictures Networks India under the first phase of the business transactions.

ZEEL management is expecting to complete the transaction by the end of August, or first week of September.

“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 and CEO Punit Goenka had reportedly told analysts regarding the completion of the second phase sales.

The closure of deal also includes the transfer of the TEN Sports’ operational license from ZEEL to SPN. The formalities for the transfer of the license at the Pakistan Electronic Media Regulatory Authority are almost complete.

For the sports business which is part of the second phase of transaction, ZEEL has reported a revenue of Rs 20.1 crore in the quarter ended 30 June 2017. This included Rs 19.8 crore of advertising revenue and Rs 30 lakh of subscription income. This revenue, as per the agreement, with adjustments of the economic risk and reward of these properties, goes to the SPNI, ZEEL said.

Sony had signed the agreement to buy ZEEL’s sports broadcasting business for $385 million (Rs 2,578 crore) in August last year. The sale transaction was agreed to be completed in two phases. The first part involved the India business of ZEEL’s sports broadcast network. The second part consists of TEN Sports overseas business.
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 has said while announcing its fiscal first quarter financial performance.

Meanwhile, ZEEL has announced a revenue of Rs 630.1 crore in the fiscal 2017 from its sports business. The previous two fiscal years to have recorded almost similar figures of 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.