Disney looking at JV/sale for Star in India: Reports

According to a Wall Street Journal article, Disney plans to explore strategic business ventures for its Star India business. 

 

According to the report, Disney could be considering options which include a joint venture or sale. The company has talked to at least one bank about ways to help its Indian business scale. The report added that these business talks are in the early stages, and it is unclear which options, if any, Disney might pursue. 

 

Disney paid USD 71.3 billion in 2019 for entertainment assets of 21st Century Fox. At the time, Star India was an important part of Disney’s plan to build out its streaming business globally. The deal gave Disney the broadcast and streaming rights for the Indian Premier League (IPL). Star’s Hotstar mobile-first streaming service, which at the time ofered most of its content free, had 150 million monthly active users and was growing because of the cricket rights.

 

That changed last year. Disney lost the streaming rights for the tournament to Viacom18's Jio Cinema. According to the report, Hotstar is expected to lose 8-10 million subscribers in its fiscal third quarter.

 

Star’s overall revenue for the fiscal year ending September 2023 is expected to drop around 20% to slightly less than USD 2 billion. Its earnings before interest, taxes, depreciation and amortisation is expected to fall roughly 50% for that time period, from about USD 200 million last year. Star is expected to lose money in Disney’s 2024 fiscal year, stated WSJ's sources. 

 

Research firm Media Partners Asia projected Disney+ Hotstar could lose 15 million subscribers in fiscal 2023 as a result of the lost streaming rights.  

 

Disney has told investors it aims to make its streaming business profitable by September 2024, a goal that was set by former CEO Bob Chapek and that current CEO Bob Iger has said he will hit. Some of the businesses that had helped subsidise streaming have experienced weakness of late, including the legacy TV business and theme parks.

 

The company, which is engaged in a cost-cutting efort that includes thousands of layofs, is scheduled to report quarterly earnings on 9 August.