Zee acquires 50% stake in Ten Sports

The investment is based on an enterprise value of US$ 114 million (Approx AED. 420 Million).

This is a great strategic move for Zee that reinstates Zee's seriousness and belief in the genre of sports broadcasting. Ten Sports is the leading sports channel in the Indian sub continent with the highest viewership amongst sports channels. Ten Sports has rights to leading cricket properties like Pakistan Cricket Board, Sri Lanka Cricket Board and the West Indies Cricket Board. These rights combined with the BCCI neutral venue rights that Zee Sports has, creates the single largest repertoire of cricket programming. Among the other sports, Ten Sports also has rights to the UEFA Champions League, WWE, US Open, and Hockey World Cup, which rate amongst the most popular programs. Zee Sports also has the rights to Indian football, Davis Cup, WTA, and the Italian Series A. Both the sports channels will be able to leverage these properties to their maximum potential across both platforms.

Ten Sports, which is headquartered out of its state-of-the-art office complex in Dubai Media City, also operates separate beams in the Middle East, Pakistan, Sri Lanka, Bangladesh and Hong Kong. This combined with the Indian presence of Zee Sports, makes the combination a true pan-Asian player in the arena of sports broadcasting.

On the acquisition, Mr. Subhash Chandra, Chairman, Zee Telefilms Ltd. said: "This acquisition is an important step for Zee towards consolidation in the media industry. We are confident that this will add significant value for the shareholders of Zee. The acquisition of a 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. I have known Mr. Abdul Rahman Bukhatir for sometime now and have the greatest respect for him as a businessman, and his leadership as one of the most successful conglomerates in the Middle East, and more particularly the achievements that he has had in the areas of manufacturing, retail, construction, and especially the way he has popularized cricket in the Middle East. I am certain that our joint partnership will result in a mutually beneficial relationship."

Mr. Abdul Rahman Bukhatir, the promoter of Ten Sports said: "I am very proud of the success we have been able to achieve with Ten Sports. Sports television is an extremely challenging business, and yet we have in a short time established ourselves as a major player. I believe that we will now take Ten Sports to unprecedented heights by joining hands with Zee Network and Mr. Subhash Chandra. I have the utmost respect for him as a business man and I have been very impressed by the leadership position he and his team have staked out in every line of the media business, from content to cable to DTH to international. Ultimately, I see our partnership as one which will change the industry"

Zee Sports and Ten Sports will be able to draw significant amounts of synergy from each other in operating in the Asian market place. Moreover, this move would consolidate the number of sports broadcasters in the region, thereby bringing about a price correction in the burgeoning rights fees for various sports properties.

Zee Network already has a major presence in the Middle East through its regional arm Real Media. The network has a dedicated Middle East beam for Zee TV. It recently set up the Middle East beam for Zee Cinema thus contributing to the enormous popularity Hindi films enjoy with the Arab population in the region. Last year, Zee Arabiya the channel catering to the Middle East youth was launched by them. The network is in the process of setting up Zee Towers to strength its infrastructure in this region.

Dubai has been the regional head quarters of the Zee Network and through this office it controls the MENA and Pakistan markets.

Yogesh Radhakrishnan MD & CEO of Real Media Zee Network said: 'Under the guidance of His Highness Sheikh Mohammed bin Rashid Al Maktoum Dubai has seen tremendous growth and enterprise, we have been encouraged to invest into this region mainly due to this factor. Our investment in infrastructure, uplinking out of Dubai and now investing into a Dubai based company Ten Sports shows our commitment to this region.'

Mr. Himanshu Mody, Business Head, Zee Sports said "The addition of Ten Sports gives us a significant strength enabling further effective exploitation of all our 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."

On the occasion, Mr. Chris McDonald, CEO, Ten Sports said: "As has been reported on many occasions, we had been in discussion with various potential strategic investors. Without question Zee, Asia's premier media concern, is the right choice for us. They bring many strengths to our business".

Following this move the Taj TV financial statements shall be consolidated on a line by line basis in Zee's books. Taj TV's average annual revenues for the next 3 financial years will stand at approx. US$ 50 million, whist the average EBITDA for the next three financial years will be approx. US$ 14 million.