After several rounds of talks and feverish media speculation, the decks seem to have finally been cleared for Sony Entertainment Television (SET) picking up a 50 per cent stake in Taj Television, the Dubai-based owner of Ten Sports channel. The valuation of the sports network — a niggling issue that has forced negotiations to drag on for over a year — has been fixed at around $140 million, it is reliably learnt.
The deal, once it is struck, will give Sony a 24-hour sports channel — a deficiency it has had for the last few years. SET has the ICC World Cup rights till 2007 but other than that, there is no other cricket or significant sports property in its kitty. The Sony-Discovery distribution company 'One Alliance' currently distributes Ten Sports.
Ten Sports, on the other hand, has major cricket assets in the form of telecast rights for Pakistan, Sri Lanka and the West Indies for the next few years. It also holds the rights to Sharjah cricket as well as matches in Morocco.
The official announcement of the 50:50 partnership could be as soon as within the next two weeks. Taj Television, promoted by West Asian oil magnate Abdul Rehman Bukhatir, has also been in talks with Zee Telefilms and the Sahara Group to offload a portion of its equity.
“Both the boards of SET and Taj Television have cleared the deal. The details, though, still have to be worked out,” said a member of the SET board on condition of anonymity.
"The matter should be settled one way or the other within two weeks," Taj Television CEO Chris McDonald told the Hindustan Times from Dubai. The chief executive officer of SET Kunal Dasgupta, who has been shuttling back and forth from Dubai, said: “There is many a slip betwixt the cup and the lip." However, he said that if the deal went through, it will not be a complete buyout of Ten Sports but more in the nature of a strategic partnership.
The contentious issue that dogged SET's entry was the valuation issue that swung in the $120 million to $165 million band. If the partnership works well, Taj Television could offload another tranche of 20 per cent or more to SET, it is learnt. The two sides are currently said to be working out issues that include taxation and regulatory matters in the shareholders agreement.
The SET-Ten Sports tie-up assumes importance in the context of the ICC World Cup rights for 2008-2015, coming up for bidding again. The two groups together could present a strong front against other competitors like ESPN Star Sports.
"Ten Sports on its own will only bid for regional rights for the ICC World Cup. However, if SET comes on board, the situation will change," McDonald said.