Star India has filed a claim for $940 million (approximately ₹8,000 crore) in damages against Zee at the London Court of International Arbitration (LCIA).
The legal battle between Star India and Zee Entertainment Enterprises Ltd. (ZEEL) has escalated into a high-stakes arbitration case, involving claims of over ₹8,000 crore ($940 million). This case stems from an alliance agreement signed in August 2022, under which Star was to provide Zee with sub-license rights for the broadcast of ICC men’s cricket events from 2024 to 2027. However, Star India alleges that Zee breached the terms of this agreement, leading to its termination and prompting Star to seek substantial damages.
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Background of the Dispute
The agreement between the two media giants was focused on securing TV broadcasting rights for major cricket tournaments. Cricket, being a prime driver of viewership in India, represents significant revenue potential, especially for advertising and subscriptions.
Star claims that Zee did not comply with the terms set out in the agreement, leading to what they believe is a valid termination of the deal. Following this, Star initiated arbitration proceedings in the London Court of International Arbitration (LCIA) earlier in 2024.
Star India’s Claims
On September 16, 2024, Star India formally presented its case before the LCIA Arbitral Tribunal. The company is seeking damages for the alleged breach, which they estimate at $940 million, along with costs, expenses, and interest, all to be assessed as of August 31, 2024, which serves as a proxy date for the tribunal’s eventual ruling. Star is also seeking a declaration that the termination of the agreement was justified and in line with the terms of the contract.
Zee’s Response
In response, Zee has categorically denied all claims made by Star India, calling them “unfounded” and asserting that they will strongly contest the case. According to Zee, the arbitration is still in its early stages, and the LCIA tribunal has yet to make any determinations regarding their liability. Zee also emphasized that they are prepared to defend their position based on the merits of the case.
Zee’s regulatory filing noted that the company “categorically refutes all claims and assertions made by Star, including its claims for damages.” The media conglomerate also reserved the right to pursue further legal measures, if necessary, as the case progresses.
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Financial Implications
The arbitration and potential damages could have significant financial ramifications for both companies. Zee’s stock has already been affected by the dispute, trading lower by 0.68% at ₹132 as of mid-September 2024, which is a stark contrast to its 52-week high of ₹299.50 reached in December 2023. The resolution of this case, depending on the outcome, could further impact Zee’s financial health, especially if they are found liable for the claims brought by Star.
On the other hand, Star India‘s claim represents a major effort to recoup losses from the failed agreement and assert its standing in the lucrative sports broadcasting sector. Cricket broadcasts drive significant revenue, and losing rights or facing financial disputes around major cricket events could hinder both companies’ future profitability.
Looking Ahead
The case is set to continue in the LCIA, with the tribunal expected to assess the validity of Star’s claims and Zee’s defenses over the coming months. Both companies are key players in the Indian media landscape, and the outcome of this arbitration could reshape the dynamics of sports broadcasting rights and alliances in the country.
As of now, the next steps in the case involve further submissions and hearings before the LCIA tribunal, which will eventually determine whether Zee is liable for the ₹8,000 crore in damages that Star has claimed.
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