Analysis of AND Sony Pictures India LTD.: Zee Entertainment Enterprises LTD

ANALYSIS OF
ZEE ENTERTAINMENT
ENTERPRISES LTD.
AND
SONY PICTURES INDIA LTD.
G RO U P 4 :
BH UM I K A Y A D A V | ROOPSHA DEB | SARTHAK SAHU | S H U B H A M
MALLIK
SONY PICTURES ZEE
INDIA
S ony P ictures N etworks India i s ENTERTAINM ENT
an Indian media conglomerate Zee Entertainment Enterprises
owned by Sony Pictures ( formerly Z ee Telefilms) i s
Entertainment. an
I t manages and operates 2 6 Indian media conglomerate.
television channels, the streaming I t has interests in
media platform SonyLIV, as well as television, print, internet, f
the television studio Studio NEXT i lm, mobile
and f i lm studio S ony P ictures content and related businesses
International Productions. and operates 4 5 channels
worldwide.
Sony has made every attempt. I t actively pursued cricketing
properties after purchasing the K B C r ights. H owever, i t
was unable to draw in the same kind of viewership as Star PRE-
and M ERGER
Z ee did. A game- changer will be the acquisition of Z ee
and the creation of a unified programming of over 1 0 0 HISTORY
channels with combined revenues of over $ 2 billion.
AGREEMENTS The company will Shareholders of
WITHIN THE comprise of 9 ZEE will get
directors: 5 decided shares of the
M ERGE by SPNI and 4 as merged company
R independent directors after it's de-
listing
New Sony is expected Transactions under Punit Goenka, CEO

Company to put in $1.57 non- compete and M D of ZEEL,
Shareholding: bn as investment Agreement: SPE will will assume the top
3.99%: ZEEL into the new pay non-compete fee position in the
Promoters company, most to ZEE's current merged entity.
45.15%: Zeel of which shall go promoters: to be used However, the
Public to "content (IPL to infuse primary majority of the
Shareholders rights, originals, capital into SPN board of directors
50.85%: Sony films) and allowing purchase of (5) will be
Group Corp. technology 2.11% of combined nominated by the
company Sony Group.
Perspective
1 SECOND LARGEST DEAL IN INDIAN ENTERTAINMENT INDUSTRY
C ombined R evenue of 1 . 79 billion U S D ( 1 )
Sharing 75 channels, 2 OTT platforms, 2 f i lm studios & a digital content
studio
to establish a strong presence in entertainment, sports and regional markets
2 BATTLING INTERNAL WOES IN RESPECTIVE FIRMS
ZEE's fallout with Invesco( holding 18 % share) and a INR 10000 cr
debt S O N Y ' s profits shrinking to INR 5 6 4 cr from INR 9 7 6 cr in FY 2 0
3 ESTABLISHING SYNERGIES IN CONTENT
ZEE has an extended regional network , whereas S O N Y has presence in kids
and sports channels; Together they would reinforce the sports segment
The merged entity might strengthen to bid for IPL broadcasting r ights which l
4 ies with Disney- Hotstar; ( Estimated Price INR 3 0 , 0 0 0 crores for 5 years)
FORTIFYING THE OTT PRESENCE
Zee- Sony merged entity would command 19 % market share on the OTT
space which i s presently dominated by Disney+Hotstar( 26 %) and
SYNERGIES AND POTENTIAL THREATS
Zee controls almost a quarter of Indian TV viewing with i ts 4 9 networks. According to
estimates from the Broadcast Audience Research Council, the pair will have a 2 8 % share
of Indian TV viewing, surpassing leader Disney Star.
Karan Taurani, senior vice- president at Elara Capital: " the combination would produce
favourable cost synergies for the television industry, as well as greater profitability and a
strong digital content offering."
Partnership controls 2 2 % of the market for advertising revenues.
Projected combined digital business: $ 9 , 1 0 0 crore ( FY 2 4 ) . Room for revenue growth s

ince a s ignificant move to SVo D ( subscription video- on- demand) i s anticipated to occur
in the
upcoming years.
Propulsion of ZEE into an international stage.
However, Zee and Sony must f i le a detailed notice with the Competition Commission of India
as the merger has the potential to create market dominance. “ The approval from the Ministry
of Information and Broadcasting will also be required apart from the stock exchanges and
SEBI.” Further, NCLT may take 6 - 1 2 months to adjudicate upon the merger.
H O W D O E S THE FUTURE L O O K ?
ZEEL' s regional general entertainment channels ( GEC) and movies & Sony' s foothold on Hindi
GEC and sports segments will help the combined entity consolidate across different genres
capturing a total network share of 28 %
Combined O TT share of 13 % will make i t the 4 th largest player in

the market, this will bring in more content for them to present to their
subscribers
With the ZEEL partnership, Sony could also see some of the gaps being f i l led, particularly
in i ts bouquet of entertainment channels, which have largely depended on seasonal productions
such as Kaun Banega Crorepati for i ts success.
ZEEL subsidiary Zee Music also falls under the scope of this deal. Zee Music commanded a 30 %
share. Sony - Zee merger will create the second largest music production house after T- Series
with i ts presence and distribution both internally & internationally.
Analysts suggest this deal could help ZEEL quell some of the concerns raised by shareholders
pertaining to corporate governance issues with an international company l ike Sony getting on
board.
A P P EN D IX
Netflix
Others 20%
26%
ALT
Balaji Amazon Prime
4% 20%
Sony
LIV
4% Zee5
9%
Disney+ Hotstar
17%
Indian OTT market

share
Source-IBEF Media & Entertainment Report
Source-Indian Express
A P P EN D IX
Source-IBEF Media &

Entertainment
Report
REFERENCES
H T T P S : / / W W W . B U S I N E S S T O D A Y . I N / M A G A Z I N E / I N D U S T R Y / S T O R Y / W H A T - T H E - ZEE- S O N Y -
M E R G E R - WILL- L O O K - LIKE- 3 1 8 0 8 3 - 2 0 2 2 - 01 - 14 A C C E S S E D O N 20 TH JULY, 22
H T T P S : / / E C O N O M I C T I M E S . INDIATIMES. C O M / I N D U S T R Y / M E D I A / E N T E R T A I N M E N T / M E D I A / Z E E -
S O N Y - M E R G E R - C O M P A N I E S - A L L - SET- T O- SIGN- O N - T H E - D O T T E D - L I N E / A R T I C L E S H O W / 8 8 4 2 1 9 8 2 .
CMS
A C C E SSE D O N 2 0 T H J U L Y , 2 2
H T T P S : / / I N D I A N E X P R E S S . C O M / A R T I C L E / E X P L A I N E D / E X P L A I N E D - ZEE- E N T E R T A I N M E N T -
M E R G E R - W I T H - S O N Y - P ICT U R E S - N E T W O R K S - 7 5 2 7 0 1 6 / A C C E S S E D O N 20 T H JULY, 22
H T T P S : / / W W W . F O R B E S . C O M / S I T E S / C H E R I E H U / 2 0 1 7 / 0 9 / 2 3 / H O W - INDIA- T H E - G L O B A L -
MUSIC-
I N D U S T R Y S - S L E E P I NG - G I A N T - IS- F I N A L L Y - W A K I N G - U P / ? SH= 6 B 7 C 2 1 4 4 3 0 BF A C C E S S E D O N 20 T H
JULY, 22
H T T P S : / / W W W . IBEF. O R G / I N D U S T R Y / M E D I A - E N T E R T A I N M E N T - INDIA A C C E S S E D O N 20 TH JULY,
22 H T T P S : / / W W W . BU SI NE S S- S T A N D A R D . C O M / A R T I C L E / C O M P A N I E S / Z E E - E N T E R T A I N M E N T -
BOARD-
C L E A R S - M E D I A - F I R M - S- M E G A - M E R G E R - W I T H - S O N Y - 1 2 1 1 2 2 2 0 0 4 7 8 _ 1 . H T M L , A C C E S S E D O N
20 T H JULY, 22
H T T P S : / / W W W . L IV E M I NT . C O M / C O M P A N I E S / N E W S / Z E E L - S O N Y - SIGN- M E R G E R -
A G R E E M E N T - 1 1 6 4 0 1 4 2 2 8 0 2 5 1 . H T M L , A C C E S S E D O N 20 TH JULY, 22
H T T P S : / / W W W . B B C. C O M / N E W S / W O R L D - ASIA- INDIA- 5 9 7 5 2 0 6 5 , A C C E S S E D O N 20 TH
JULY, 22
H T T P S : / / W W W . N E W I N D I A N E X P R E S S . C O M / O P I N I O N S / 2 0 2 1 / D E C / 2 6 / A F T E R - T H E - ZEE- S O N Y -
M E R G E R - E N T E R T A I N M E N T - IS- A- 3 - C O R N E R E D - FI GH T - 2 3 9 9 7 4 7 . H T M L , A C C E S S E D O N 20 TH JULY,
TH A N K
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ANALYSIS OF

New Sony is expected Transactions under Punit Goenka, CEO

Partnership controls 2 2 % of the market for advertising revenues.

Projected combined digital business: $ 9 , 1 0 0 crore ( FY 2 4 ) . Room for revenue growth s

Propulsion of ZEE into an international stage.

Combined O TT share of 13 % will make i t the 4 th largest player in

Indian OTT market

Source-IBEF Media &

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