According to a source familiar with the matter, Walt Disney (DIS.N) is currently exploring various options for its digital and TV business in India, including the possibility of selling the business or finding a joint venture partner. The discussions are still at a very early stage, and no potential buyers or partners have been approached yet. It remains uncertain how the process will unfold.
The source stated that internal discussions have begun at Disney headquarters in the United States to determine the best course of action. However, Disney did not respond to a request for comment from Reuters. On Tuesday, Disney's shares closed with a 1.6% increase.
The Wall Street Journal initially reported on Disney's talks and mentioned that the company has approached at least one bank to explore options for supporting the growth of its India business while sharing some of the associated costs.
These discussions are taking place amidst growing pressure on Disney due to the rise of Reliance Industries' (RELI.NS) streaming platform JioCinema, which is operated by Mukesh Ambani, Asia's wealthiest individual. Ambani has been promoting his streaming platform by providing free access to the Indian Premier League cricket tournament, whose digital rights were previously held by Disney. Research firm CLSA has estimated that Disney+ Hotstar's subscriber base in India decreased by nearly 5 million users after losing digital rights to the IPL.
Viacom18, Reliance's broadcasting venture that manages JioCinema, recently struck a deal with Warner Bros in April to obtain popular content such as HBO shows and Succession. Several of these highly-rated shows were previously aired in India on the Disney platform.
Shareholders of Viacom18 include Reliance, Paramount Global (PARA.O), and Bodhi Tree, a joint venture between James Murdoch and former Star India executive Uday Shankar. Disney's India business consists of the Disney+ Hotstar streaming service and Star India, which it acquired along with the entertainment assets of 21st Century Fox in 2019.
The source, who wished to remain anonymous due to the confidentiality of the talks, mentioned that finding a buyer outright in India would be challenging, as the enterprise value of the India business was estimated to be around $15-16 billion when Disney acquired Fox's business.
Disney Star, formerly known as Star India, includes numerous TV channels and a stake in a movie production company.
Like other streaming and media companies, Disney is implementing cost-cutting measures in response to economic challenges affecting advertising revenue and subscriber growth. In February, the company announced plans to eliminate 7,000 jobs as part of a broader restructuring effort aimed at saving $5.5 billion in costs.