Disney, Reliance to merge India media ops to create Rs 70,000 cr behemoth
Walt Disney Co and Reliance Industries have announced a landmark merger of their media operations in India, a deal valued at Rs 70,000 crore. Under the agreement, Reliance and its affiliates will hold a majority stake of 63.16 per cent, while Disney will retain the remaining 36.84 per cent.
Reliance has also agreed to invest at closing Rs 11,500 crore into the joint venture to give it the muscle to fight rivals such as Japan’s Sony and Netflix.
Disney + Hotstar has seen its paid subscriber base decline from around 55 million to about 40 million in the first quarter of FY24 because of Reliance’s Jio Cinema winning exclusive rights for live sports. The combined entity will have the largest OTT subscriber base.
Reliance’s media ventures, currently housed in Network 18, include TV18 news channels, entertainment channels under the ‘Colors’ brand, sports channels, and digital platforms like moneycontrol.com and bookmyshow. Additionally, Reliance owns movie production arm JioStudios and majority stakes in cable distribution companies Den and Hathway.
Its subsidiary NW18 owns the news channels CNBC/CNNNews.
Disney + Hotstar, launched in 2020 after Disney’s acquisition of 21st Century Fox’s entertainment assets for $71.3 billion, holds a prominent position in the Indian market with channels like StarPlus and StarGold and sports channels under Star Sports.
While Disney + Hotstar rapidly increased their subscriber base initially with the streaming rights of cricket matches (IPL, World Cup), it lost the bid for the digital streaming rights in 2023-27 cycle, which was won by Reliance-backed Viacom18 for USD 720 billion, 12.92 per cent higher than what Star India had paid on an average per match value.
The joint venture will be led by Nita Ambani, with Uday Shankar as the vice chairperson. Shankar, a former Disney executive, brings extensive industry experience to the partnership.
The transaction values the joint venture (JV) at Rs 70,352 crore ($8.5 billion) on a post-money basis, excluding synergies.
“Disney may also contribute certain additional media assets to the JV, subject to regulatory and third-party approvals,” the statement said.
The JV will have over 750 million viewers across India and will also cater to the Indian diaspora across the world.
The joint venture will also be granted exclusive rights to distribute Disney films and productions in India, with a licence to more than 30,000 Disney content assets, providing a full suite of entertainment options for the Indian consumer.
Reliance Chairman Mukesh Ambani called it a “landmark agreement” that will offer “unparalleled content at affordable prices” to Indian audiences.
Disney CEO Bob Iger highlighted India’s market potential and the opportunity to create a “leading media company” with a broad entertainment and sports content portfolio.
The deal awaits regulatory and other approvals and is expected to be finalized between late 2024 and early 2025.
The Disney Reliance media merger deal contrasts the failed plans of rivals Sony and Zee last month. This merger which could have created a $10.5 billion entity, was called off by Sony Group and both sides are mired in litigations and arbitrations.
