Sony to Buy TEN Sports for $385M to Boost Sports Profile
In a bid to boost its sports profile, Sony Pictures, part of Sony Corporation SNE, inked a definitive agreement to buy the sports broadcasting business of India's Zee Entertainment Enterprises — TEN Sports Network — for $385 million. This acquisition will add South Asia's foremost sports network to Sony Pictures and complement its current offerings in cricket, football and fight sports.
The completion of the deal is subject to regulatory approvals.
Ten Sports operates a multitude of sports channels including Ten 1, Ten 2, Ten Cricket and Ten Sports, which are broadcast across India, Hong Kong, Maldives, Singapore, Middle East and the Caribbean. The network is predictably weighted toward cricket and soccer, and will augment Sony's rewarding holdings of broadcast rights for the Indian Premier League's Twenty20 cricket tournament as well as the 2018 FIFA World Cup.
Furthermore, this network will add a number of tournaments such as English Football League Cup, Tour de France and Moto GP along with broadcast rights to key sporting events like the Asian Games and Commonwealth Games.
This deal will enable Sony Pictures to enhance its platform strength to nine channels in the country, thus cementing its position as one of India’s leading sports broadcasters. It will also be a strong contender to Star India, which operates eight sports channels under the Star Sports brand.
According to Sony Pictures, India remains a robust growth driver of its expanding networks business, of which sports are a substantial part. The Ten Sports acquisition follows the launch of the Sony ESPN channels, and will expand the viewership of Sony’s Indian networks to over 800 million viewers.
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Sony has been active in making accretive acquisitions and joint ventures, in order to drive growth and improve market share. For instance, during first-quarter 2016, the company invested in U.S. technology start-up – Cogitai – to fortify its foothold in the artificial intelligence domain. It also closed the buyout of Belgium-based company – eSATURNUS NV – to strengthen its presence in digital healthcare.
However, Sony faces numerous headwinds such as foreign currency fluctuations, intense competition and natural calamities like the recent Kumamoto earthquakes, which are likely to result in material losses for the company. Further, a majority of Sony’s businesses, including Mobile Communications and Components, have been bearing the brunt of prolonged weakness in smartphone sales and battery business.
Sony currently holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader sector include Adidas AG ADDYY, Central Garden & Pet Company CENT and SodaStream International Ltd. SODA. All three stocks sport a Zacks Rank #1 (Strong Buy).
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