Disney, the well-known entertainment giant, has agreed to merge a significant portion of its Indian media operations with Viacom18. This decision values Disney’s India business at a notably lower $3.9 billion, a decrease from its worth during the 2019 acquisition.

What Happened? First reported by The Wall Street Journal, under the deal, Disney will maintain a 40% stake in its India operations. Reliance Industries will hold a majority of 51% and Bodhi Tree Systems will acquire 9% of the remaining shares.

Viacom18, a collaborative venture involving billionaire Mukesh Ambani’s Reliance, Paramount Global, and Bodhi Tree, will provide around $1.5 billion (₹12,447 crore) in cash and stock for this stake.

Why it matters? The merger with Viacom18 is particularly noteworthy as it brings together former Disney India chief Uday Shankar and media mogul James Murdoch, both of whom have been instrumental in growing the Star India brand. Their new venture, Bodhi Tree, backed by substantial investments, has already shown significant interest in India’s media sector.

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A key challenge for Disney in India has been the high costs of broadcasting cricket, a major sport in the region. The skyrocketing prices for TV and streaming rights have strained Disney’s efforts to balance substantial content investments with the modest subscription fees affordable to most Indian viewers.

In a significant development in June 2022, Viacom18 acquired the streaming rights for the Indian Premier League cricket, surpassing Disney with a $2.6 billion bid. This loss resulted in Disney shedding over 12 million streaming subscribers in India, as revealed in their quarterly earnings report. The decline mainly stemmed from Hotstar, a Disney streaming service, losing IPL streaming rights.

Moreover, Disney’s challenges are compounded by economic factors, including the depreciating value of the Indian rupee since the 2019 acquisition. Other sports rights deals, like the one with Zee Entertainment, have added to Disney’s difficulties in maintaining profitability in the Indian market.

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