Sony Pictures Networks India (SPN) will acquire Ten Sports for Rs 2,600 crore ($385 million) from Subhash Chandra-run Zee Entertainment Enterprises (ZEE).

Zee Entertainment Enterprises Ltd’s sports broadcasting business (TEN Sports) has been a drag for a long time now. The business has posted operating losses continuously for the last seven years at least. ZEE had paid $107 million (Rs 500 crore) in installments during 2006-11 to acquire Ten Sports from Dubai-based Abdul Rahman Bukhatir’s Taj Group. Its accumulated losses from the sports business are pegged at Rs 600-640 crore.

Singh and ZEE managing director Puneet Goenka signed the deal on Wednesday and the transaction is expected to be completed in four-five months.

A former Ten Sports chief said the deal would benefit buyer, seller and rival. “I think that it’s good news for all parties and also for Star,” said Peter Hutton, currently CEO of Eurosports. “Sony gets a business that will help drive all affiliate and ad sales revenues and Zee will get the cash to invest in their wider business and improve their immediate cashflow, while Star will see less competition in the Indian sports rights market, reducing the potential inflation rate of sports properties.”

Meanwhile, the company has performed well on the advertising revenues front in recent quarters including the last quarter. For this year, Zee expects to outperform industry advertisement growth.

So far this fiscal year, Zee shares have outperformed the benchmark Sensex. Currently, one share trades at 41 times its estimated earnings for this fiscal year. That prices in most of the upside.