Disney to Step Back From India in Mega-Deal with Reliance Industries


The Walt Disney Company announced on Wednesday a joint venture with India’s biggest conglomerate, Reliance Industries, in an $8.5 billion deal that will create a media powerhouse in the world’s most populous nation and end Disney’s decades-long solo effort to gain a foothold in the market.

Reliance Industries, which is owned by Mukesh Ambani, India’s richest person, will be Disney’s senior partner in the deal. With $239 billion in market capitalization and rights to the wildly popular Indian Premier League cricket matches, Reliance is a juggernaut in the media landscape in India.

Disney and Reliance already had a combined market share of about 40 to 45 percent in advertising and about the same fraction of streaming, giving them a big edge over competitors, said Karan Taurani, a research analyst at Elara Capital.

“This will lead to better profitability because the content costs could come down” in both TV and streaming, Mr. Taurani said.

As part of the deal, Disney will merge its Indian operations with those of Viacom18, a part of Reliance Industries. Reliance and Viacom18 will hold 63 percent of the new venture, and Disney 37 percent, the companies said in a statement. Reliance will pay $1.4 billion to consolidate its control.

Nita M. Ambani, Mr. Ambani’s wife, will be the chair of the joint venture; the vice chair will be Uday Shankar, the former chairman of Disney India.

“Reliance has a deep understanding of the Indian market and consumer,” Robert A. Iger, Disney’s chief executive, said in a statement. “We’re excited for the opportunities that this joint venture will provide to create long-term value.”

Disney is one of the biggest of companies in the world, valued at $200 billion; in India, though, it proved no match for the homegrown hero.

Disney first came to India, now a country of 1.4 billion potential media consumers, in 1993, and found a distributor to broadcast some of its content.

Along with India’s market, Disney’s ambitions grew. Last year, the accounting and consulting firm EY estimated that India’s media landscape would be worth $30 billion this year and $100 billion by 2030. And Disney banked on bringing hundreds of millions of subscribers to its own streaming services.

Disney’s adventures in India were at their high point in 2019, when it bought 21st Century Fox from the Murdoch family’s News Corp. Among Fox’s assets, Disney won TV and streaming rights to the Indian Premier League cricket matches.

Big subscriber numbers followed, but at great cost. At its pandemic-fueled peak, Disney+ had 162 million subscribers in India, but it was losing almost $500 million worldwide in pursuit of viewers. By summer 2022, its global operations had bled more than $11 billion since the purchase of Fox and launch of Disney+.

That is when Disney ran into trouble. Reliance Industries snatched away the cricket rights in 2022 for nearly $3 billion. Disney lost 11.5 million Indian subscribers in short order, even as it gained 800,000 new ones in the rest of the world.

Still, Disney is not abandoning India.

“India remains a key market for the company and one of the strongest international growth markets of scale, and we are committed to ensuring a robust presence there,” Disney executives said in an email to employees on Wednesday.

When Reliance was started by Mr. Ambani’s father in 1958, it was a trading shop, mainly of polyester fiber. It grew into petrochemicals and now runs the world’s largest oil refinery at the port in Jamnagar, on a remote bit of India’s western coastline. Along the way, it got into telecommunications and other businesses, and in 2016 started a low-cost mobile network, Jio, which quickly became the world’s third largest.

JioCinema, part of a growing family of Jio properties but a relatively small platform when India’s streaming wars began, looks likely to become the new home for Disney’s content in India. At one point another rival looked ready to emerge, as the Japanese media giant Sony was seeking to expand its operations in India by buying Zee Entertainment.

With Zee, India’s first private cable-TV company, Sony would have been big enough to divide up the TV-and-digital market with Reliance and Disney. But Sony backed out of its deal with Zee on Jan. 22, frustrated by the founding family’s insistence on maintaining control.

Sony’s breakup with Zee seems to have made things even harder for Disney. For one thing, Zee still owes Disney for cricket licensing. Bloomberg reported that the estimated value of Disney’s India unit sank to $4.5 billion from $10 billion. Sony’s failed merger also made the eventual Disney deal look sweeter for Mr. Ambani: What would have been a landscape defined by two giants is instead looking likely to be dominated by just one.

Being such a sprawling conglomerate, Reliance has an advantage in the battles for media domination. It does not need content to pay for itself directly. When their subscribers are brought into their retail, telecom and credit operations, the cost of making shows looks small by comparison to combined revenue.

Brooks Barnes contributed reporting from Los Angeles.



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