Punit Goenka says ZEEL poised to participate in the IPL media rights e-auction

Zee Entertainment Enterprises Limited (ZEEL) believes it can compete in the Indian Premier League (IPL) media rights e-auction by itself, because it has a stable financial position and no debt. “On our own, we can enter the IPL tender. With no debt, we have a very strong financial position. ZEEL MD and CEO Punit Goenka remarked during the company’s Q4 earnings call, “We certainly have the qualification to participate in the tender,” he added. Goenka said the corporation can bid for a portion (TV or digital) or the complete (TV plus digital) of the IPL media rights, which are being split by the BCCI.
“This does not preclude us from bidding on either portion or the entire project. We’re weighing our options to see what the greatest long-term approach is for the organisation.” Asked if the company will avail debt to fund the IPL media rights acquisition, Goenka responded that the money needed for the IPL media rights bid does not have to be paid up front. “We don’t have to pay anything up ahead, nor do we have to pay a significant sum of money. Only when the rights begin to be used do you have to pay for them. There are just tools like bank guarantees, etc., till then,” he said. In response to a question on Viacom18’s funding from Uday Shankar and James Murdoch’s Bodhi Tree Systems, Goenka said he wasn’t concerned about competition because the media and broadcasting industry has always been cutthroat.
“This industry has always been competitive, so we aren’t seeing anything new. Zee has the potential to compete with both deep-pocketed and multinational brands, as we have proved multiple times in the past, and I don’t expect anything to fall behind this time,” he stated.
He also noted that competition is good for the broadcasting industry since it would result in greater content investments, which will lead to increased monetisation. “As more material is created, more consumption occurs, and hence more revenue is generated. We enjoy competition because it keeps us on our toes and motivates us to perform better.”
Goenka stated that ZEEL filed the scheme of arrangement for the merger with Sony Pictures Networks India (SPNI) with the stock exchanges in January and is awaiting clearance. In addition, in February, it filed a pre-filing with the Competition Commission of India (CCI), which was followed by an official filing in April. Once the other approvals are in place, it will seek NCLT approval. “In January 2022, we submitted the plan of arrangement between the two corporations, as well as crucial paperwork, with the BSE and NSE. The two stock exchanges have yet to give us their clearance. Furthermore, in February 2022, we filed a pre-filing with the CCI. We filed a formal filing with the CCI for the planned merger in April 2022, based on the advice we obtained on our pre-filing,” he explained. “After gaining the requisite approvals from the stock exchanges, we expect to submit the scheme of arrangement to NCLT, which will call for a shareholder meeting to ratify the plan in due time,” he added.

In his introductory remarks, Goenka stated that the movie industry has made the most significant comeback in the media and entertainment (M&E) sector, owing to the total reopening of cinemas across the country in the fourth quarter. “During the quarter, our studio business fared remarkably well at Zee, with films in many languages like as ‘The Kashmir Files’ and ‘Valimai’ receiving extremely strong box office responses.” Indeed, The Kashmir Files went on to gross more than Rs 200 crore at the box office, making it one of the few films to do so after the pandemic’s impact,” According to Goenka, Zee Studios is a critical part of the company’s portfolio, and it plays a crucial role in the success of both linear and digital companies. Zee Music, on the other hand, is a significant portion of the company’s repertoire.
Goenka admitted that ad revenue is still being eclipsed by a number of reasons, including persistent stress in the FMCG sector, which is the largest spender on television advertising. Goenka, on the other hand, is optimistic that advertising would expand in FY23. The substantial rise in inflation, along with higher input costs for this category, had an impact on marketing spends, which had a cascade effect throughout the sector. Furthermore, the ancillary effect of the current conflict between Russia and Ukraine, as well as the bigger economic element surrounding it, will continue to have an influence on advertising income in the near future, Goenka explained. Goenka stated that in the broadcasting industry, the focus is still on refining services to reflect changing customer tastes, and that major efforts have been directed at key markets such as Hindi, Marathi, and Tamil. “We have excellent teams in place for each market, and I am confident in their ability to help us reclaim our market share in each of these markets very soon,” he said.
He also stated that the broadcast rate freeze is continuing to harm broadcasters’ subscription revenue. He also mentioned that Zee Anmol has been removed from DD Free Dish in order to combat the pay-TV universe’s downturn. “As a proactive action to support the pay-TV industry, we withdrew our Hindi GEC from the DD Free Dish because the pricing ban continues to damage our subscriber income,” he added. While there may be some short-term consequences, he sees it as a long-term positive step.
ZEE5’s operating and financial metrics, according to the ZEEL CEO, have been improving. “We’re pleased to see that our efforts to improve content and the overall user experience have paid off in this way.” According to Goenka, M&E businesses will concentrate their investments on a seamless blend of content and technology in order to efficiently serve consumers across all platforms. “Our goal will always be to grow the industry gradually in all aspects, and we will invest actively to achieve that goal.”