The Zee-Sony split may mean less choice for TV advertisers

Market dominance by a Reliance-Disney-Star union looks likely

Sony's decision to walk away from a $10 billion Indian media merger will put large advertisers like Unilever and Procter & Gamble in a bind. To reach the country's 1.4 billion-plus population, they may have no option except to go through a prospective rival.

The Japanese media giant's local unit has sent a termination letter to Zee Entertainment. What probably sank the deal was the insistence by Punit Goenka-Zee's chief executive officer-that he should lead the post-merger entity.

While Goenka-the son of Subhash Chandra, the Indian network's 73-year-old founder was the original choice as CEO of the combined entity, the country's stock market regulator has since accused the father-son duo of siphoning off funds from the publicly traded firm. With an inquiry still ongoing, Sony didn't want to get tarnished by a corporate-governance scandal.

In its letter, Sony cited conditions of the merger agreement not being met as the reason for the termination. Zee said that Goenka was agreeable to stepping down in the interest of the merger.