The Walt Disney Company is demanding that a major corporation pay it nearly a billion dollars over a hugely expensive sports entertainment failure, but likely not the one (or even the second) you might think.
Disney is increasingly investing in joint ventures with other companies, and it has not been going exactly well. While Disney’s senior vice president of strategy and business development, Nami Patel, says that the Disney+, Hulu, and Max streaming bundle is “working really well,” there has been a lot more failure than success of late.
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Most notably, the Venu Sports joint venture that the Mouse has been preparing with Warner Bros. Discovery and Fox Corp to dominate the streaming sports market in the United States was shut down before it even launched.
A federal judge called it potentially anticompetitive and said there was basically no reason to believe that these three giant corporations wouldn’t immediately start price fixing once they knocked out smaller competition.
As one might expect, Disney immediately appealed that injunction and apparently claimed that the judge fundamentally “didn’t understand” the case; apparently, she needed to more fully comprehend that the company wanted to make a whole lot of money over streaming sports.
That case spilled over into a very heated and public fallout with the DirecTV network, which resulted in millions of Americans losing access to ESPN and other Disney channels. They have since been restored, but it is safe to say that the Mouse House is currently on a losing streak when it comes to sports ventures.
That brings us to Disney’s arbitration against Zee Entertainment Enterprises Limited, a major Indian entertainment media company. Disney India (previously Disney Star) is demanding a whopping $940 million from Zee Entertainment, claiming those are the damages owed after the latter company reneged on payments for cricket broadcasts (per Variety).
Cricket is the most popular sport in India, the world’s largest consumer market, by a huge margin. As such, every major media company has been trying to lock down broadcast and streaming rights to the sport for years now, which Disney appears to have finally achieved with its new joint venture with Reliance Industries.
In January, Disney won the right to broadcast (both via TV and digital means) cricket events for the International Cricket Council (ICC) between 2024 and 2027. The company almost immediately licensed TV broadcast rights to several ICC tournaments to Zee Entertainment.
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The deal collapsed swiftly as Zee Entertainment failed to make even its first payment (estimated to be some $200 million) to Disney. Since then, the Mouse has been pursuing Zee in the London Court of International Arbitration, now officially asserting that $940 million is the bill for damages, costs, expenses, and interest.
As you might expect, Zee Entertainment isn’t jazzed about this.
It issued a statement saying it “categorically refutes all claims and assertions made by [Disney Star], including its claims for damages. The arbitration is at its initial stage, and the LCIA Arbitral Tribunal is yet to determine if the Company is liable in any manner. [Zee Entertainment] will, on merits, strongly contest all unfounded claims by Star and reserves all its rights.”
Maybe Disney should start thinking about why it gets into so many legal issues when it comes to sports.
What do you use to watch your favorite sports? Cable, satellite, broadcast, or streaming?