According to sources familiar with the situation cited by the Wall Street Journal, Walt Disney is reportedly considering a variety of strategic options for its Star India business, including potential plans for a joint venture or a sale. The company has held conversations with at least one bank to find ways to expand its India business while also splitting some of the costs involved.
Details on Disney considers strategic alternatives for the Star India Company
It is still unclear which specific options Disney might pursue in relation to its Indian operations even though the talks are still in their early stages. The popular Disney+ Hotstar streaming service and Star India make up the conglomerate’s India operations. Disney acquired Star India in 2019 after purchasing the entertainment assets of 21st Century Fox.
According to the WSJ report, Star India expects its overall revenue for the fiscal year ending September 2023 to fall by about 20% and end up at slightly less than $2 billion. Additionally, it is anticipated that its earnings before interest, taxes, depreciation, and amortization (EBITDA), which were approximately $200 million last year, will drop by about 50% this year.
The report also states that Hotstar anticipates losing 8 million to 10 million subscribers during its third fiscal quarter. These developments highlight the difficulties Star India, which changed its name to Disney Star the year before, faced. The media conglomerate’s operations in India include a large number of television channels and a stake in a well-known film production company.
Disney is proactively implementing cost-cutting measures, along with other players in the streaming and media industries, in response to the negative effects of macroeconomic factors on advertising revenue and subscriber growth. The company announced a significant restructuring initiative in February that would result in the loss of 7,000 jobs while saving $5.5 billion in costs.
The fact that Disney is considering strategic options seems to have boosted investor confidence, as the company’s shares ended Tuesday up 1.6%.
