Reliance’s Viacom18 likely to pick up 50% stake in Disney India

Reliance continues to be in talks with Disney India to merge the American entertainment giant’s local businesses with Viacom18, with the Ambani-led company likely pick up atleast a 50% stake in the merged entity.

The latest agreement between Disney India, Viacom18 and Bodhi Tree will likely see Disney retain 40% of the merged business, with the other 60% split between the other two entities, according to a Wall Street Journal report. Bodhi Tree is reportedly eyeing up a 7-9% stake.

For Bodhi Tree – a joint venture between James Murdoch and a former Star India executive, Uday Shankar, formed in 2021 – the merger is a return to familiar ground, with the Murdoch-Shankar duo having worked together to build Star, before its eventual purchase by Disney in 2019. Shankar was CEO of Star India for a decade until 2020.

Disney has been in talks to merge its business with the Ambani media house since December, with the WSJ reporting that Viacom18 will pay about $1.5 billion in cash in addition to stock in return for its stake in the merged company. The deal is expected to close in February, with terms not yet finalised.

Ealier this week, Bloomberg reported that Disney’s India assets are valued at around $4.5 billion, less than the $10 billion the US entertainment giant has previously pursued.

The dip in valuation is partly attributed to a write-off of revenue from the sale of cricket TV rights by Disney to embattled Zee Entertainment Enterprises Ltd., which is now expected to be unable to pay up.

Disney’s struggles with streaming in India were exarcebated after Viacom18 outbid the American company to the rights for the Indian Premier League, shelling out $2.6 billion to stream the tournament till 2027.

In August 2023, Disney’s quarterly earnings showed a 12 million drop in streaming subscribers in the subcontinent, largely attributed to the loss of IPL streaming, which had been a mainstay on Hotstar.

Hotstar’s subscriber count stood at 37.6 million in the most recent quarter, down from a peak of 61.3 million in October 2022.