ZEE Entertainment Share Price: Will Acquiring ICC Events TV Rights Increase ZEE Entertainment Shares?

Shares of ZEE Entertainment were trading down about 2% in Thursday’s trade despite the media company’s acquisition of the television rights to ICC events for four years, thanks to reports suggesting that CCI in its initial review has felt the merger between the Indian unit of Japanese Sony and Zee Entertainment to create a $10 billion TV business will potentially hurt competition by having “unprecedented bargaining power”.

A few brokers were mixed on the company’s acquisition of television rights.

Kotak Institutional Equities said ZEE’s decision to acquire the television rights to ICC events (2024-27) for a likely $1.4-1.5 billion supports the emerging view that sports broadcasting is less vulnerable to OTT disruption and that a portfolio approach (entertainment + sports) is essential to safeguard the core TV business.

Kotak said sports broadcasting is generally unprofitable and that’s not expected to change given high content inflation and the shift from TV to OTT.

“Under these conditions, we do not fully appreciate/understand Zee’s decision to increase investments in sports TV rights (we would have preferred greater investments in OTT). Besides, CCI has raised some issues that could potentially delay the Sony-Zee merger,” he noted while suggesting a fair value of Rs 260 for ZEE shares.

“A lot of things you like or love don’t necessarily translate into money for you or return for shareholders. I love cricket, but would I buy Zee for this reason? No. When it comes to Zee, the stock, more than financial, it continues to be governed by the news feeds around it and some of those news feeds are true, some of them don’t turn out to be true on a period of time. It’s not on my list of stocks for medium-term investors,” said Kunj Bansal of Investment-illiteracy.com.

Bansal said it was a good title for trading and continued to provide trading opportunities. beg to differ. He said that although ZEE did not disclose any figures on the license agreement, given that it is an installment payment agreement, he does not expect a significant impact on profitability.

Also, the deal does not affect the ZEE-Sony merger, which is currently in the process of being approved, he said, adding that with the ‘World Cup’ broadcast rights, Zee is expected to attract strong advertising and channel subscriptions, which will drive revenue and profitability growth. .

“By the time this agreement takes effect, ZEE-Sony will likely be a merged entity with a strong balance sheet focused on building its presence in sports,” he said. This brokerage has a target of Rs 370 on the stock.

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