Walt Disney’s India sports business might have witnessed the thrilling drama of the 2023 Cricket World Cup, but the financial scoreboard paints a different picture. The company revealed a staggering $315 million (Rs 2613 crore) operating loss for the quarter ending December 2023, a 144% surge compared to the previous year. This significant loss primarily stems from the high costs associated with hosting the marquee event.
While Star India, Disney’s sports arm in the country, saw its sports revenue jump 71% due to the World Cup, the increased programming, production, and rights costs outweighed the gains as per The Economic Times. Higher average costs per match and a larger number of matches broadcasted significantly impacted the bottom line.
Despite the financial loss, there were some silver linings. Advertising revenue grew, thanks to increased viewership and more ad units sold, even though ad rates slightly dropped. Additionally, Star India’s streaming service, Disney+ Hotstar, witnessed a modest subscriber base growth and a significant increase in average revenue per user due to a mix of factors like price hikes and higher ad revenue.
Cricket World Cup costs dearly to Disney India sports business
However, the loss highlights the challenges Disney faces in its Indian sports business. While cricket enjoys immense popularity, the high cost of acquiring broadcast rights and managing large-scale events like the World Cup can significantly impact profitability.
On a global scale, Disney’s sports business, including ESPN and Star Sports, saw a positive 4% revenue growth, but the operating loss decreased by 37%. This indicates that the loss in India was a major contributor to the overall negative performance in the sports segment.
Looking ahead, Disney aims to turn its streaming business profitable in the final quarter of this fiscal year. The company remains confident despite a slight dip in Disney+ subscribers and a price hike. It also expects continued growth in its parks division.
In conclusion, while the 2023 Cricket World Cup brought excitement to Indian fans, it came at a hefty price for Disney’s sports business in the country. The company faces the challenge of balancing the immense popularity of cricket with the financial realities of managing such high-profile events.
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