Zee Entertainment Enterprises Ltd., embroiled in a financial squeeze, has missed a crucial $200 million payment to Walt Disney Co.’s India unit for television rights to cricket matches.

What Happened? Sources close to the situation, preferring anonymity, revealed to ET that the Mumbai-based media giant cited cash flow issues as the reason for the non-payment of the January instalment. The missed payment, part of a larger $1.4 billion agreement made in August 2022 for the rights, has prompted Disney to seek an explanation from Zee.

This financial hiccup may entangle Zee in legal complexities and exacerbate its challenges as its proposed merger with Sony Group Corp. appears increasingly unstable. According to insiders, Zee has not provided the bank guarantees required for the payment under the contract’s terms.

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Is Zee under serious pressure? Reports on Monday by Bloomberg News indicated that Sony might issue a deal termination notice to Zee, although Zee maintained on Tuesday that efforts to finalize the merger are ongoing.

In a country where cricket is near-religious, Zee had secured the television rights in hopes of boosting viewership and advertising revenue. However, following the news of the missed payment, Zee’s shares dropped by 14% on Tuesday, later recovering slightly but still closing 7.7% down as Mumbai’s market index showed gains.

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