Disney Explores Strategic Options for India Business

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Talks are a sign of how Star India’s fortunes have changed since Disney’s purchase of Fox entertainment assets​

Cricket coverage rights are seen as crucial to the success of Disney’s Star India business. PHOTO: BRADLEY KANARIS/GETTY IMAGES

Disney DIS 1.58%increase; green up pointing triangle is exploring strategic options for its Star India business, including a joint venture or a sale, a sign of strain at one of the premier properties it acquired from Fox FOX 0.28%increase; green up pointing triangle.

The company has talked to at least one bank about ways to help the India business grow, while sharing some of the costs, according to people familiar with the matter. The talks are in the early stages and it is unclear which options, if any, Disney might pursue.

Disney and many of its rivals are in the throes of a costly pivot toward streaming and away from traditional TV businesses. Toward that effort, they spent heavily on deals, content and technology at home and abroad, with mixed success.

Disney paid $71.3 billion in 2019 for entertainment assets of 21st Century Fox. At the time, Star India was considered one of Fox’s crown jewels, and it was an important part of Disney’s plan to build out its fledgling streaming business globally.

The deal gave Disney the broadcast and streaming rights for increasingly popular Indian Premier League cricket matches as well as dozens of TV channels in several languages and a stake in a production company that makes Bollywood movies. Star’s Hotstar mobile-first streaming service, which at the time offered most of its content free, had 150 million monthly active users and was growing rapidly, largely because of the popular cricket rights.

That business’s fortunes changed last year after Disney lost a bidding war for the rights to continue streaming those cricket matches. Without that programming, the service became less appealing to many users. Hotstar is expected to lose 8 million to 10 million subscribers in its fiscal third quarter, some of the people familiar with the matter said.

Star’s overall revenue for the fiscal year ending September 2023 is expected to drop around 20% to slightly less than $2 billion, the people said. Its earnings before interest, taxes, depreciation and amortization is expected to fall roughly 50% for that time period, from about $200 million last year, they said.

That is a sharp decline from Fox’s projections before the deal that Star India would earn $1 billion in Ebitda by 2020. Star is expected to lose money in Disney’s 2024 fiscal year, the people said.


Disney earns far less per streaming customer in India than in the U.S., and that number has dropped. Hotstar generated an average of 59 cents in revenue per subscriber each month in the April quarter, down from an average of $1.20 at its peak in the summer of 2022, according to Disney earnings reports.

Disney lost the digital cricket rights in a bidding war last year to Viacom18, a joint venture between Paramount Global and Indian billionaire Mukesh Ambani’s Reliance Industries.

That joint venture also includes Bodhi Tree Systems, run by Uday Shankar, a former CEO of Star India, and is backed by Lupa Systems, a holding company controlled by James Murdoch, former CEO of 21st Century Fox. James Murdoch is the son of media baron Rupert Murdoch, executive chair of Wall Street Journal parent News Corp NWSA 1.79%increase; green up pointing triangle.

At the time, Disney agreed to pay $3 billion to retain the rights to broadcast the IPL on its Star India television network through 2027, a price tag that raised eyebrows among Wall Street analysts.

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 subsidize streaming have experienced weakness of late, including the legacy TV business and theme parks.

The company, which is engaged in a cost-cutting effort that includes thousands of layoffs, is scheduled to report quarterly earnings on Aug. 9.

WSJ News Exclusive | Disney Explores Strategic Options for India Business

The talks are a sign of how Star India’s fortunes have changed since Disney’s purchase of Fox entertainment assets.

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