While the merger deal of Zee Sony was announced over two years ago, it was recently called off. It was to be the intended second-largest after Star and Disney India, an arrayed entity with 75 matches featuring passion by including sports and regional constraints other than two OTT sites.
Zee and Sony, however, are losing their chance to fight those labels head-on. The whole industry is also interested in how they will deal with the current situation now that one of them had to give such a result away
It is noted by those, who are aware of the transaction that both parties pointed out having clear justification in this issue as to why they thought it reasonable to move forward with it.
“On the part of Zee, it was primarily set in motion by financial issues; however, for Sony there was a business requirement,” remarked one banker. He stated that the precarious position of Zee was because it had a huge amount in debt at the promoters’ level and holding company, Essel Group.
Meanwhile, Sony had a minor share with nothing to show outside Hindi general entertainment, and handing over the rights of IPL meant going down by not having one major source for generating revenue.
There is a high probability that both Zee and Sony now will keep the doors to their establishments open since there exists no alternative investor.
In June last year, an interim ruling from the Securities and Exchange Board of India (Sebi) precluded Subhash Chandra, Chairman Essel Group conglomerate’s subsidiary Zee Entertainment as well as no other listed enterprise to hold key managerial posts. However, he claimed that the opposition parties were guilty of having allocated funds to private firms.
The reason is also considered to be one of the major factors that prevented the Zee-Sony merger from working.
In a more recent development, between Reliance Industries and Disney, the report of these two giants have signed a non-binding pact to merge their broadcasting businesses. Altogether, the number of channels is almost 110.
Such will result in both Zee and Sony becoming small players. Interestingly, however, on a global level, Sony does not seem very interested in funding into the television business per sources.
A broadcasting industry official said, “It hence means India will still work within the same capacity operations.” Currently, he said that perhaps there could be a deal established between the two companies – Sony and Disney as they have no more barriers to negotiate with. The future looks promising.
