While RIL values Disney Star at $3-4 billion, Walt Disney is reportedly eyeing a valuation of $10 billion, as per a Bloomberg report.
Disney Star, the Indian arm of Walt Disney, comprises TV and digital assets, including about 70 sports and entertainment channels across languages and the Disney+ Hotstar streaming platform.
Star India was valued at a whopping $18 billion in 2017 when it was acquired by Walt Disney as part of the 21st Century Fox buyout. India (Star) and the UK (Sky) were two of the biggest drivers of deals between Disney and Fox, according to people in the know.
Disney bought Star India as part of its $71 billion acquisition of 21st Century Fox, but lost out to Comcast for the Sky asset in the UK. Comcast acquired Sky for $40 billion in 2018.
In April this year, RIL’s entertainment arm, Viacom18, was valued at $4 billion after a ‘15,000 crore fund infusion by RIL and Bodhi Tree Systems, which is promoted by Uday Shankar and James Murdoch.
The factors weighing against Disney Star, according to those in the know, include a drop in the paid subscriber base of Disney+ Hotstar, India’s largest streaming platform, and mounting losses from the sports business coupled with the overall decline in the pay-TV ecosystem.
Disney+ Hotstar has lost 21 million subscribers after losing the Indian Premier League (IPL) digital rights. The flight of subscribers is expected to intensify as the platform is streaming the ICC Men’s Cricket World Cup for free, besides the recently concluded Asia Cup.
Further, Walt Disney’s regulatory filings show Disney Star’s sports business in India reported an operating loss of $444 million for the nine-month period ended July 1.
“The biggest challenge for any player who looks at Disney Star assets will be servicing the sports losses in the coming years,” said a veteran media executive, who did not wish to be identified.
Disney Star has committed close to $5 billion in sports investments between 2022 and 2027 on properties such as IPL TV rights and ICC digital rights.
On the entertainment side, Disney Star continues to be a strong player, with a 30% share of the broadcast market. The entertainment business, which includes channels such as Star Plus and Star Gold, particularly the southern business comprising channels such as Asianet, Star Maa, and Star Vijay, is highly profitable.
Experts said RIL might find Disney Star’s entertainment business much more enticing since Viacom18 lacks muscle on the entertainment side, barring Colors.
“Disney Star is very strong in regional markets, while Viacom 18 hasn’t made much headway in those, barring one odd market,” said the media executive.
