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Reports: Disney considering sale or venture partners for Star India business

Entertainment corporation has held talks with at least one bank on ways to spark India growth.

12 July 2023 Josh Sim

Getty Images

  • Disney lost the IPL’s streaming rights to Viacom18 last year
  • Streaming service Disney+ Hotstar could lose eight to 10m subscribers in Q3 2023

Disney is considering strategic options for its Star India business, which includes a potential joint venture or sale, according to multiple reports.

According to the Wall Street Journal (WSJ), which broke the story, the media giant has held talks with at least one bank about ways to help grow its India business while sharing some of the costs. Additional reporting from Reuters suggests that no potential buyer or partner has been approached yet, with uncertainty around how the process will play out given discussions are at an early stage.

Having acquired the Star pay-TV business and Fox’s TV assets in Asia as part of the US$71 billion acquisition of 21st Century Fox in 2019, Disney is now one of India’s biggest broadcasters. Star has long been a key broadcast partner of the Indian Premier League (IPL), retaining the linear TV contract during the last round of negotiations for I₹23,575 crore (US$2.87 billion) but seeing the streaming portion snapped up by Viacom18 for I₹23,758 crore (US$2.9 billion).

As a result, Star has seen a significant dropoff in subscribers for its Disney+ Hotstar streaming service, with the WSJ reporting the service could lose eight to 10 million subscribers in the third quarter of fiscal 2023.

The business publication also adds that revenue for the overall Star business for the fiscal year ending September 2023 is expected to drop around 20 per cent to just under US$2 billion. Meanwhile, earnings before interest, taxes, depreciation and amortisation (EBITDA) are expected to drop roughly 50 per cent for the same period, from last year’s total of around US$200 million.

Disney has also since chosen to wind down its operations in Asia, having decided last month to close its remaining six linear TV channels in Southeast Asia, Hong Kong, Taiwan and South Korea.

SportsPro has contacted Disney for comment.

SportsPro says…

Up until this year, Disney had a stranglehold over the IPL and that made its streaming service among the most popular in India. At last year’s auction, the surging value of the franchise cricket league rights put the media giant in a position where it had to prioritise either linear TV rights or the IPL streaming packages.

Whilst its deal for the IPL’s linear TV rights resulted in record TV viewership figures for the 2023 season, the loss of the tournament’s digital rights to Viacom18 has seen many opt to drop their Disney subscriptions, particularly as more Indians chose to stream IPL games due to cheaper mobile data costs. Viacom18 also opted to stream IPL games for free, which in turn fueled a strong movement towards its platforms.

A report earlier this year from the Economic Times indicated that the Board of Control for Cricket in India (BCCI) plans to unbundle television and digital rights for future games involving the country’s national teams. It’s possible that Disney may look to find further investment to help fund a successful bid for the rights, which reportedly could be valued in excess of I₹15,000 crore (US$1.83 billion) for the next four or five-year cycle.

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