Punit Goenka, MD and CEO of India’s Zee Entertainment Enterprises Limited, has shed light on the proposed merger with Sony Pictures Networks India.
Delivering the keynote address at media conference APOS India, Goenka revealed that the merger is in the “final stages of stitching up.”
“I certainly believe that consolidation is going to benefit the industry overall,” said Goenka. “Zee and Sony will form the largest media entertainment player in the country. Our revenues on a standalone basis combined will be close to $2 billion, and the capital growth that Sony is going to infuse in the merge entity will really give us the opportunity to invest in premium content and include sports.”
“There is going to be a huge opportunity on both the digital and the linear side to create big scale entertainment properties and acquire large IPs across genres,” Goenka said.
One of those genres could be sport. Zee had sold Ten Sport to Sony in 2017, and ever since news of the merger emerged, the market is expecting the merged entity to bid on one of the biggest sports prizes in the world, the Indian Premier League cricket tournament. Star TV, now part of the Disney stable, had won the 2017 rights war with a $2.55 billion bid. The auction for 2023-2027 rights is expected to take place imminently.
“I believe that the opportunity is great, because the digital landscape has opened up a new opportunity for monetization, which did not exist five years ago,” said Goenka. “And the sector itself will see a lot more happening going forward. So certainly sports will become an area of focus for the merged entity.”
“But the decision for bidding or not bidding, and bidding at what value etc., will be taken by the board of the new merged company, and not by me individually,” said Goenka.
The executive has been at the center of a war with Invesco, one of the leading investors in Zee with an 18% stake, which has been trying to oust Goenka and install six independent members to the board via an extraordinary general meeting of shareholders. That meeting hasn’t happened yet after the Bombay High Court allowed it to be temporarily delayed.
Goenka said during his keynote that the merger with Sony is part of his “Zee 4.0 transformative journey” game plan. “I hope that we will be able to generate significant value for the stakeholders, which include not just our shareholders, but our customers and our employees as well,” Goenka said.
Speaking about the ongoing streaming wars in India, Goenka said that Zee has been slightly late in embracing new technology compared to the global players, but that this was being rapidly redressed. “I’m certain that we will catch up very quickly and give them a fight in this market just as we have done on the linear side in the past,” Goenka said.
The strategy for Zee’s streamer ZEE5 is SVOD first, Goenka said. He predicted that the Indian SVOD market is going to jump to 200 million paying subscriptions in the next five years, up from the 40-50 million currently.
“As in any other business, our mantra has always been to be the number one or be the challenging brand and that will be our goal here as well,” Goenka said. “We have seen great growth happening not just in India, but across the world where we have launched the ZEE5 platform and we have seen growth happening quarter on quarter.”
“While India currently has more AVOD users, we believe that our strategy of being SVOD first will give us the leverage to really fight the competition going forward,” Goenka added.