Reliance Industries Ltd (RIL) and other buyers have reportedly held talks with Walt Disney Co to acquire its streaming and television business in India.
The US media giant is exploring options that include an outright sale or a joint venture for these businesses.
The Wall Street Journal was first to report news of Disney’s talks in July and said the company had reached out to at least one bank about ways to help the India business grow, while sharing some of the costs.
The development had led to speculation that Reliance, which is present in the media and entertainment business through Viacom18, may also be interested in the business.
A Bloomberg report said Walt Disney has discussed various options with potential suitors.
This includes acquisition of the Disney Star business in India or a combination of its assets that include sports rights and regional streaming service Disney+ Hotstar.
It added that Disney had approached Reliance about buying a stake in the business.
While the identity of other entities with whom Disney may have held early talks is not known, it remains to be seen if it includes the Gautam Adani group, which acquired NDTV last year, or Zee and Sony.
However, the latter has been facing roadblocks to its proposed merger.
Recently, Axis Finance had filed an appeal against an order of the National Company Law Tribunal (NCLT) that had approved the merger of Zee and Culver Max Entertainment, formerly Sony Pictures Networks India.
Axis Finance had moved the National Company Law Appellate Tribunal (NCLAT) against the tribunal’s order. It was the second financial creditor after IDBI Bank to approach the appellate tribunal.
Disney has faced increasing pressure due to the emergence of Reliance Industries’ streaming platform JioCinema. Reliance has been marketing the streaming platform by offering free access to Indian Premier League cricket tournament, digital rights of which were earlier with Disney.
Research firm CLSA has estimated Disney+ Hotstar’s subscriber base shrank by nearly 5 million users in India after it lost the digital rights for IPL.
Reliance’s broadcast venture Viacom18, which runs JioCinema, also struck a deal with Warner Bros in April for HBO and other popular content such as Succession. Several of these top rated shows earlier aired in India on the Disney platform.
Viacom18’s shareholders include Reliance, Paramount Global as well as Bodhi Tree, which is a joint venture between James Murdoch and a former Star India executive, Uday Shankar.
For Viacom18, any deal with Disney would further cement its position in broadcasting and OTT segments.
One of the main focus areas for Viacom18 has been the sports arena where it has built a strong portfolio, including highly popular properties.
According to RIL’s annual report for 2022-23, this includes digital streaming rights for IPL (2023-27 seasons), Women Premier League (2023-2027), international cricket matches in South Africa (2024-2031) and SA20 (South Africa’s T20 league, 2023-2032). It also has brands such as CNBC TV18, News18, Colors, MoneyControl and MTV, among others under its belt.
Acquisition in the media and entertainment sector is not new for Reliance which had in 2014 purchased Network18 for up to Rs 4,000 crore.
Subsequently in 2020, Reliance had consolidated its media and distribution properties under a single umbrella of Network18.
In 2022-23, RIL’s media and entertainment business saw economic headwinds and soft advertising environment that resulted in a 5.8 per cent rise in operating revenue. This was led largely by sports and movie verticals.
RIL said that despite a strong operating performance, the revenue in the core segments was subdued.
Moreover, the business made substantial investments in sports and digital segments, which impacted the profitability.
Disney, like its peers in streaming and the wider media industry, is cutting costs as macroeconomic headwinds weigh on its advertising revenue and subscriber growth.
With inputs from Reuters
