12th July 2023: Walt Disney is apparently investigating several strategic options for its Star India company, including a joint venture or a sale. The company has held negotiations with at least one bank in order to discover potential for expanding its India business while sharing some of the associated costs.
According to sources familiar with the situation quoted by the Wall Street Journal, the discussions are still in their early stages, it is unknown what exact choices Disney may explore in relation to its Indian operations.
The conglomerate’s India operations include the popular Disney+ Hotstar streaming service and Star India, which came under Disney’s control following its acquisition of 21st Century Fox’s entertainment holdings in 2019.
According to the WSJ estimate, Star India’s entire revenue for the fiscal year ending September 2023 is expected to fall by nearly 20%, finishing at just under $2 billion.
Furthermore, its earnings before interest, taxes, depreciation, and amortisation (EBITDA) are expected to plummet by nearly 50% from the previous year, to around $200 million.
According to the estimate, Hotstar is anticipated to lose 8 million to 10 million subscribers in its fiscal third quarter. These incidents highlight the difficulties encountered by Star India, which was renamed as Disney Star earlier this year.
The media conglomerate’s India operation includes a number of television networks as well as a stake in a major film production company.
Due to the negative impact of macroeconomic variables on advertising revenue and subscriber growth, Disney, along with other industry players in the streaming and media industries, is proactively pursuing cost-cutting initiatives.
In February, the business launched a major reorganisation exercise aimed at saving $5.5 billion in expenditures, which would result in the loss of 7,000 positions.
The revelation that Disney is exploring strategic options appears to have boosted investor optimism, as the company’s stock closed up 1.6% on Tuesday.
