Star India, the Walt Disney arm, has reportedly posted a standalone net loss of ₹12,548 crore for the year ended March 31, 2024. The broadcaster has cited a provision of ₹12,319 crore for an 'onerous contract' from the International Cricket Council (ICC).
Star India had filed an arbitration suit against Zee for its failure to comply with the terms of a deal the two sides struck in August 2022.
Under the deal, Star was supposed to sub-licence TV rights for matches conducted by the International Cricket Council (ICC) until 2027. Star had sought damages of $940 million for the termination of the deal.
However, the Essel group firm refused to go ahead with the TV right deal with Star India after Sony terminated a $10-billion merger agreement with the Subhash Chandra-owned media company.
The development led to Star initiating arbitration proceedings against Zee at the London Court of International Arbitration.
The India operations of Disney is now in the process of merging with Viacom18, backed by Reliance Industries.
“The company has estimated the contract with ICC to be onerous as the expected revenue from customers relating to this right as and when the related event is broadcasted/streamed is likely to be less than the cost involved in broadcasting and streaming these events and hence has estimated a loss from future events relating to these media rights to be ₹12,319.31 crore as of 31 March 2024,’’ Star said.
In its for April-June, Walt Disney Company said Star India posted revenues of $279 million against $277 million a year ago, while its losses stood at $314 million against $216 million. The company said the increase in losses at Star India was due to higher programming and production costs attributable to the ICC T20 World Cup.
In the same month, the Competition Commission of India (CCI) approved the merger of the media assets of Reliance Industries and Disney’s India business to create a media empire worth over ₹70,000 crore.
The deal, announced earlier this year, faced scrutiny from the anti-trust regulator and its approval came after the parties proposed certain modifications.
The CCI had said in August that it has cleared the ``proposed combination involving Reliance Industries Ltd, Viacom18 Media Private Ltd, Digital18 Media Ltd, Star India Private Ltd and Star Television Productions Ltd subject to the compliance of voluntary modifications”.
As per the transaction, Reliance Industries and its affiliates will hold 63.16 per cent of the combined entity that will house two streaming services and 120 television channels. Walt Disney will hold the remaining 36.84 per cent stake in the combined entity.
Reliance and Disney will divest seven TV channels and ensure that the sale of advertisement slots for cricketing events are not bundled as part of the measures approved by the CCI.
