Zee buys 50 stake in Ten Sports

In a move which would give media baron Subhash Chandra a firm footing into the lucrative sports telecast business...

In a move which would give media baron Subhash Chandra a firm footing into the lucrative sports telecast business, Zee Telefilms said on Monday that has bought 50 per cent in Dubai-based Taj Television8217;s Ten Sports channel, for an undisclosed amount.

The Mumbai-based television company will have majority representation on Dubai-based Taj TV8217;s board, and has the option to buy the remaining stake in Ten Sports after 2009.

8220;The acquisition not only gives us a strong foothold across Asia but also strengthens our operations in the Middle East,8221; Zee chairman Subhash Chandra said in a statement. The deal was based on an enterprise value of Rs 513 crore for Taj Television.

As per the agreement, Zee Sports will buy 50 per cent of Taj TV Ltd., Mauritius, while Zee Telefilms will buy 50 per cent in its Indian distribution arm, Taj Television India Pvt. Ltd. Though there would be lot of synergies between the two sports channels, it is not known yet whether both Zee Spots and Ten Sports would be merged at a later date.

The financial statements of the Abdul Rahman Bukhatir-owned Taj Television would be consolidated in Zee8217;s books, Zee said. Taj TV was expected to have an average annual revenue of 50 million for the next three fiscal years with an earnings before tax of 14 million, Zee said.

It was a longstanding ambition of Chandra to get into the sports telecast business. With the acquisition of Ten Sports 8212; which telecasts to the Middle East, Pakistan, Sri Lanka, Bangladesh and Hong Kong 8212; Zee will get rights to matches of the cricket boards of Pakistan, Sri Lanka and the West Indies, besides other sports programming like WWE wrestling matches and Davis Cup.

These rights along with Zee Sports neutral venue rights for Indian cricket board matches creates the largest repertoire of cricket programming.

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Reacting to the news, Zee8217;s shares climbed 4.5 per cent to a record high of Rs 345.50, before closing 3.3 per cent higher over their Friday closing.