Walt Disney is exploring various strategic options for its Star India business, including a joint venture or potential sale, according to sources familiar with the topic cited by The Wall Street Journal. The company has engaged in discussions with at least one bank to identify growth opportunities for its India business and share some of the associated costs.
Although the talks are still at an early stage, it is not yet clear what specific options Disney may pursue for its Indian operations. The conglomerate’s India business includes the popular Disney+ Hotstar streaming service and Star India, which came under Disney ownership in 2019 following the acquisition of 21st Century Fox’s entertainment assets.
The WSJ report indicates that Star India’s overall revenue for the fiscal year ending September 2023 is expected to decline by about 20 percent, steady below $2 billion. In addition, its earnings before interest, taxes, depreciation and payments (EBITDA) will decrease by about 50 percent from the previous year, which is less than about $200 million.
The report also revealed that Hotstar is expected to lose 8 million to 10 million subscribers in its fiscal third quarter. These developments highlight the challenges faced by Star India, which was rebranded as Disney Star the previous year. The media conglomerate’s India business covers a wide range of television channels and has a stake in a prominent film production company.
Disney, along with other industry players in the streaming and media sectors, is actively implementing cost-cutting measures due to the adverse impact of macroeconomic factors on ad revenue and subscriber growth. In February, the company announced a significant restructuring effort aimed at saving $5.5 billion in costs, resulting in the elimination of 7,000 jobs.
News of Disney’s exploration of strategic options appeared to have had a positive impact on investor sentiment as the company’s shares closed 1.6 percent on Tuesday.
