MUMBAI: Zee Entertainment Enterprises Ltd?s sports losses will be around Rs 1.4 billion this fiscal due to new channel launches and a weakening rupee, upsetting its guidance of capping losses at Rs 1 billion.

Zeel?s target of break even in the next fiscal could also be derailed. Though it is too early to fix an amount to it, a source said losses could fall in the region of Rs 600-650 million.

Zeel?s sports losses for the earlier fiscal stood at Rs 2.08 billion on a revenue of Rs 4.4 billion.

"Zeel will post sports losses of Rs 400-500 million in the fourth quarter and Rs 1.3-1.4 billion this fiscal. This is due to the launch expenses of Ten HD and Ten Golf and payouts for broadcasting rights in dollars," the source said.

The key acquisitions included Cricket South Africa rights (2013-20) for $180 million, Zimbabwe Cricket rights for $20 million (2013-18) and Uefa Champions League rights (2012-15) for $10.5 million.

In an interview with Indiantelevision.com late last year, Zeel managing director and chief executive officer Punit Goenka had said that "given our growth trajectory and contracts, the sports business should break even in two years. In the worst case scenario, we should be able to turn it around by the middle of FY?14."

For the first nine months of FY?12, the sports losses stood at Rs 892 million.

"The sports losses will be higher than Rs 1 billion but I can?t say how much. The losses will substantially reduce in FY?13," said Zeel president corporate strategy and business development Atul Das.

Taj Television, the company owned by Zeel, runs Ten Cricket, Ten Action+ (with football as its focus), Ten Sports, Ten Golf and Ten HD.

"We make profit or break even from all other sports properties except cricket. The challenge is monetisation of cricket at a profit level. Affiliate revenues should grow. Digitisation is better for us in that sense," said Zee?s sports business CEO Atul Pande.

Zeel will increase the programming hours of its flagship channel, Zee TV, in the next fiscal, leading to a rise in content costs. This will put pressure on non-Sports margins. "The marketing expense on Ditto (Zeel?s OTT platform) will also be upped. The pressure on margins will last till the first half of next fiscal. It will pick up from the second half of FY?13," the source said.

Zeel launched this year the country?s first Over-The-Top TV distribution platform, Ditto TV, with an aim to offer TV channels and On-Demand video content to consumers on their mobile phones, tablets, laptops, desktops, entertainment boxes and connected TVs.

"We are planning a few channel launches in the next fiscal," said Atul Das, while declining to comment on the specifics or the financial terms.

MUMBAI: Zee Entertainment Enterprises Ltd. (Zeel) is gearing up to launch a golf dedicated channel next month and has signed a three-year exclusive partnership deal with Professional Golf Tour of India (PGTI), the official sanctioning body of professional golf in India.

Ten Golf will become India?s first exclusive golf channel. The deal provides Ten Golf with the broadcasting rights for all PGTI-sanctioned tournaments within and outside the country from 2012 - 2014.

Announcing the partnership, PGTI Director Padamjit Sandhu said, "Professional golf in India has had strong positive growth over the last five years under PGTI. We are today at a stage where it is important for us to showcase the depth of Indian talent and their achievements with the support of a professional electronic medium. To further grow golf, and project the opportunities and the potential the sport has, it is important to have a strong broadcast partner. With Ten Golf we see strong synergies, and are confident that their expertise, knowledge and bandwidth will substantially help take Indian golf to the next level."

Taj Television India CEO Atul Pande said, "Our sports broadcast strategy of building committed viewers, in specific sports, has led to the idea of the golf channel - Ten Golf. Our tie up with PGTI will help in strengthing the Indian Tour. We will be working closely with Asian Tour and European Tour to bring world class golf action for viewers in India and the subcontinent."

It will broadcast a weekly show titled "Inside the PGTI". This show will highlight the best golfing action from PGTI events and will feature golfers on the PGTI circuit. The sports channel will also air special promos and fillers based on Indian golfers and the PGTI tour.

Ten Golf will be the latest addition to the bouquet of products offered by Taj Television Limited, whose portfolio includes Ten Sports, Ten Cricket, Ten Action+, Ten HD. Ten bouquet of channel reaches 100 million households across India, the company said.

MUMBAI: Zee Entertainment Enterprises Ltd (Zeel) and Pakistan Television (PTV) jointly bid and bagged the four-year telecast rights to the International Cricket Council (ICC) events for the Pakistan territory, a top official said.

The rights through 2015 will include the ODI World Cup, the Twenty20 World Cup and other ICC events.

"We jointly bid for the ICC rights with PTV for the Pakistan territory. We were awarded the rights by ESPN Star Sports," said Ten Sports chief executive officer Atul Pande, while refusing to disclose the financial terms of the deal. 

ESPN Star Sports has the global rights for the ICC events from 2007-2015.

"While PTV will have the terrestrial rights, we will keep the cable and satellite rights," Pande said.

Ten Sports has a long relationship with PTV and has been syndicating its properties to PTV for terrestrial telecast.

"We have a partnership with PTV to build Pakistani cricket. We, for instance, will be syndicating the rights for Pakistan-Zimbabwe and Pakistan-Sri Lanka cricket series to PTV for terrestrial telecast. We also jointly bid for the ICC property as part of our deepening relationship with PTV," Pande said.

MUMBAI: Zee Entertainment Enterprises Ltd (Zeel) has posted a healthy 26.7 per cent jump in its second-quarter net profit as revenue stayed flat in a weak advertising environment.

A 4.2 per cent drop in ad revenue has been cushioned by a 2.3 per cent cut in costs, helping the company to beat the profitability forecast made by market analysts.

Zeel?s consolidated net profit for the three-month period ended 30 September stood at Rs 1.6 billion compared to Rs 1.26 billion a year ago. Analysts had forecast the company to earn a net profit of Rs 1.40 billion.

Operating revenue stood at Rs 7.18 billion, marginally up from Rs 7.12 billion. However, the company clarified that the operating revenues and expenditure for Q2 are not comparable to the earlier year because of the "change in accounting treatment of domestic subscription revenues, which are now being reported net of expenses."

Zeel chairman Subhash Chandra said, "The Indian economy continues to grow at a good pace but high inflation and the resultant tight money policy of RBI is taking its toll. While the economic situation in India is far better than most other countries, market sentiment continues to be cautious. This caution has affected advertising spends on television, which has witnessed some deceleration. The good part is that the television economy continues to grow robustly on the back of subscriber growth and digitisation." 

The consolidated operating profit (Ebitda) for the quarter was up 10.1 per cent to Rs 2.07 billion, from Rs 1.88 billion in the year-ago period. Operating profit margin stood at 28.9 per cent.

Finance expenses during the quarter were Rs 56 million, up 1085 per cent year-on-year.

During the quarter, Zeel?s advertising revenue saw a decline of 4.2 per cent to Rs 3.95 billion compared to the earlier year. Zeel clarified that the decline is due to the fact that the corresponding quarter last fiscal had some India-centric cricket properties. Excluding sports, advertising revenues have shown an increase.

The company, however, feels that the ad environment will stay weak this fiscal.

Subscription revenue for the quarter stood at Rs 2.91 billion, registering an increase of 6.3 per cent over the corresponding quarter of the previous fiscal. During the current quarter, domestic subscription revenue stood at Rs 1.95 billion, while international subscription income was at Rs 959 million, down 3 per cent. Domestic cable accounted for 12.8 per cent of the revenue, while domestic DTH accounted for 14.3 per cent.

Overall, programming and operating cost in the quarter was Rs 3.22 billion as against Rs 3.46 billion in the corresponding period of the previous fiscal, a reduction of 6.8 per cent.

Employee cost increased by 7 per cent; selling and other expenses in the quarter were at Rs 1.2 billion, as against Rs 1.13 billion in the earlier year. Total costs incurred by the company in this quarter stood at Rs 5.11 billion, showing a reduction of 2.3 per cent.

The numbers as published are after consolidating the financials of Taj TV Limited (Taj). It also includes financial results of regional general entertainment channel business (R-GEC) acquired from Zee News Limited (ZNL) and 9X business undertaking of 9X Media.

Zeel?s sports business posted a revenue of Rs 881 million, while costs incurred in this quarter was Rs 1.11 billion.

Zeel MD and CEO Punit Goenka said, "Zee Entertainment has a wide portfolio of television channels and we have seen some gains and some losses in our market shares during the quarter. We are confident that we would continue to grow our business profitability in a sustained manner. During the quarter, we have seen a healthy increase in our operating margins, partly due to lower sports losses and partly due to better cost efficiency measures. Though advertising spends are better sequentially, overall trends remain subdued and FY?2012 does look to be a year of tepid growth in advertising spends on television. Our strategy during the last few years has been to create a formidable entertainment enterprise and invest in the business in a focused disciplined way."

The flagship channel, Zee TV, and Zee Marathi have lost market shares to competition.

"We are working towards correcting the loss in market shares in some of our businesses," said Goenka.

Shares of Zeel rose 1.1 per cent to close Monday at Rs 113.3 on the BSE.