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Subash Chandra-promoted Zee Telefilms on Monday announced acquisition of 50 per cent stake in Dubai-based Ten Sports for Rs 256.5 crore (Rs 2.56 billion) as part of efforts to cement its position in sports broadcasting business.
"This is a great strategic move for the company that reinstates the company's seriousness and belief in the genre of sports broadcasting," the company said in a communication to the Bombay Stock Exchange.
Terming Ten Sports as a leading channel in India with the highest viewership among sports channels, Zee said: "The investment is based on an enterprise value of $114 million (about Rs 513 crore)."
Zee Group had entered the sports broadcasting arena about two years ago and has since been aggressively bidding for telecast rights of leading sports events, including broadcasting of Indian cricket.
Both Zee Sports and Ten Sports had last week bid for ICC's global telecast and marketing rights for an eight-year period commencing 2007.
Commenting on the acquisition, Zee Telefilms chairman Subhash Chandra said: "The acquisition of stake in Ten Sports not only gives us a strong foothold in the arena of sports broadcasting across Asia but also strengthens our operations in the Middle East."
Ten Sports, which has been scouting for a partner and was also in talks with Sony and Nimbus, has rights to leading cricket properties like Pakistan Cricket Board, Sri Lanka Cricket Board and the West Indies Board.
These rights combined with BCCI neutral venue rights that Zee Sports has, creates the single largest repertoire of cricket programming, Zee said.
Besides the cricket rights, Ten Sports also hold the rights for UEFA Champions League, WWE, US Open Tennis, Hockey World Cup. On the other hand, Zee Sports has rights for Indian football, Davis Cup, WTA, Italian Serie A football.
It said Zee Sports and Ten Sports will be able to draw significant amount of synergies from each other in operating in the Asian market place.
The company also said the acquisition will consolidate sports broadcasters in India, bringing a price correction in the burgeoning rights fees for various sports properties.
"The operational synergies between Zee Sports and Ten Sports would be tremendous and we should be able to run the two channels at much better economies of scale," Himanshu Mody, business head, Zee Sports said.
Taj TV's annual revenues for the next three financial years will stand at about $50 million, while the average EBIDTA for the same period will be approximately $14 million, the communique said.