SONY-ZEE MERGER After the Break-up

The merger between Sony and Zee has been called off. But it may have sparked a wave of consolidation in the industry

- KRISHNA GOPALAN

AFTER HUFFING AND PUFFING, the much-touted merger between Culver Max Entertainment (Sony India) and Zee Entertainment Enterprises (Zee) was finally called off just a little over two years since it was announced amid fanfare. Had the deal gone through, it would have created a broadcasting major with 75 channels and two OTT platforms, with a strong presence in entertainment, sports and regional channels. Besides, there was limited overlap, making it a clear strategic fit.

But the merger came up against many challenges along the way. The most prominent among them was an interim order by the Securities and Exchange Board of India (Sebi) last June that barred Essel Group Chairman Subhash Chandra and his son Punit Goenka from holding key managerial positions in Zee. Sebi accused them of having diverted money to private entities. While Chandra is the Promoter of Zee, Goenka is the company's MD and CEO. More critically, the latter was tipped to be the MD and CEO of the merged Sony-Zee entity. The case landed in the courts and, not entirely unexpectedly, Sony pulled the plug on the deal.

75 Channels

THE POTENTIAL PORTFOLIO OF THE MERGED SONY-ZEE ENTITY IF THE DEAL HAD GONE THROUGH

The question now is how Zee and Sony will deal individually with a challenging media and entertainment landscape. Much has change in those two years, and there is the possibility that the two will have a media behemoth to compete with. This is because Reliance Industries’ media business and Disney Star are looking to merge their operations, and there are concerns about the merged entity’s impact on smaller players, as the broadcasting business will have close to 110 channels.