The Hindu Business Line : Zee Tele turns weak on court suggestion

SHARES of Zee Telefilms Ltd (ZTL) were beaten down for the second day in a row as market continued to remain disappointed over the developments pertaining to the grant of rights by the Board of Control for Cricket in India (BCCI).

Today, ZTL declined by Rs 1.7 to Rs 149.45 after touching a low of Rs 147 on the BSE. In the last two days, the counter has lost Rs 10.

The stock of ZTL was on a firm upturn after it emerged as the highest bidder for the rights to broadcast national and international cricket matches to be played in India between October 2004 and September 2008. BCCI granted the rights to Zee after a series of negotiations.

However, this trend was reversed on Thursday after the Bombay High Court proposed that both Zee and ESPN-Star Sports go in for a re-bid.

Zee had emerged the highest bidder for these rights at the $260 million followed by ESPN-Star at $230 million. In the final round of negotiations, this bid amount was raised further to $308 million.

However, the issue did not end here as ESPN-Star filed a petition against BCCI's decision to grant rights to Zee.

According to equity analysts tracking the company, the bagging of rights will provide a major spike in ZTL's future earnings not only in terms of a jump in advertising revenue but the cricket property will help the company to expand its distribution reach through cable as well as DTH.

"But with the developments now in the court everything depends on the outcome next week," said a broker.

He said funds and operators have been exiting the stock over the last two days.

Market participants have assumed a `wait-and-watch' approach as far as the shares of ZTL are concerned, he said.

However, there are worries about how ZTL will tie-up the financial requirements for the rights if it eventually bags it.

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