Subhash Chandra-owned Zee Entertainment has asked Dubai-based Taj TV for a one-month extension of a deadline to acquire a higher stake in Ten Sports.
Sources close to the development said Zee had the option of increasing its stake by October 31, at the 2006 valuation. Zee executives, however, have requested an extension till the end of November.
Zee, which holds half the company's shareholding, might raise its stake to either 90 per cent or buy out Taj TV's 50 per cent stake. Zee bought its stake in Ten Sports three years ago, based on the company's valuation of over Rs 500 crore.
"If Zee fails to buy the remaining stake by the end of November, then it will have to buy the stake at a valuation suggested by Taj TV, which is likely to be higher than the 2006 valuation," added the source.
Zee and Taj TV have been in talks for a while now but discussions were stuck over valuation. "Zee would like Taj to retain 5 to 10 per cent, since Taj has contacts with the west Asian cricket boards," added a source close to the development.
Asked about the talks, Zee Sports CEO Atul Pande said via a text message: "We own 50 per cent in Ten Sports and it is a partnership we are proud of. Ten Sports forms a key part of the Zee portfolio on the go-to-market and distribution side and we continue to drive the business aggressively behind our strategic sports initiatives. We are also looking to expand the bouquet by adding more specific sports-dedicated channels and programming."
He did not, however, confirm whether Zee is close to increasing its stake in Ten Sports. Several attempts to contact Puneet Goenka, CEO, Zee Entertainment Enterprises, failed.
Zee's 50 per cent acquisition in Ten Sports helped Zee leverage some of Ten Sports properties for Zee Sports. Zee Sports was banking on Subhash Chandra's Indian Cricket League — an alternate to the popular Indian Premier League 20-Twenty tournament — for audiences and revenues.
The failure of this project under pressure from the Indian cricket board left it with little compelling content.
The most saleable programme on Ten Sports is the World Wrestling Entertainment. The channel does, however, have the telecast rights of five boards, Pakistan Cricket Board, Sri Lanka Cricket Board, Middle East, South Africa and the West Indies Cricket Board.
The rights for the Pakistan matches were attractive, but the political compulsions in south
Asia that impelled India not to play matches in Pakistan proved a major dampener.
According to TAM Media Research data, the channel share of Ten Sports (across sports channels Neo Cricket, Neo Sports, DD Sports, Star Cricket, ESPN and Zee Sports) has dropped from 63 per cent in 2006 to 34 per cent in 2009. It is now the second-largest channel after Star Cricket (39 per cent).
On the hand, the Zee Sports channel share has dropped from 9 per cent in 2006 to 1 per cent in 2009. As of 2009, Neo Cricket has a 17 per cent share, Neo Sports has 2 per cent, DD Sports 1 per cent and ESPN 6 per cent.
Zee Sports currently has no cricketing property to bank on, whereas rival channels Neo Sports and Nimbus have increased their market share after winning the telecast rights of all international matches played in India, in addition to domestic matches.
ESPN, too, is strong with the acquisition of the rights to the ICC and Champions League T20 tournaments.
