In the midst of a fierce global battle for streaming content, Walt Disney Co. has chosen not to maintain the broadcasting rights of a popular Indian cricket league amid high bid prices in a recent auction.
The company has owned the valuable television and broadcasting rights of the Indian Premier League, a popular cricket league, for the past few years, but was willing to skip the rights for the next five years as bids increased.
Viacom18, a joint venture between Network18 Group of India and Paramount Global PARA,
the transmission rights of the IPL 2023-2027 were taken home. Jay Shah, the honorary secretary of the Cricket Control Board in India, tweeted that Viacom18 paid about 238 billion rupees, which is equivalent to about 3 billion dollars.
Disney DIS,
he retained the league’s television rights, paying $ 3 billion, according to The Hollywood Reporter, which cited “several local sources.” The cost of the rights has risen since the last auction, when 21st Century Fox, which has since been acquired by Disney, acquired television and broadcasting rights for a total of $ 2.2 billion.
“We are pleased to expand our partnership with the Indian Premier League and look forward to offering the next five seasons in our TV channel portfolio,” Rebecca Campbell, president of Disney’s international content and international operations, said in a statement to MarketWatch. “We have made disciplined offers focusing on long-term value. We decided not to continue with digital rights given the price needed to secure this package.”
Disney’s statement did not mention the price paid for the television rights.
Viacom18 and Paramount Global did not respond to a request from MarketWatch to comment on Viacom18’s participation in the auction or the price it paid for the transmission rights.
Disney has used its current IPL streaming rights to bolster its Disney + Hotstar service and help build additional subscribers.
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The auction has been the source of some anxiety on Wall Street, as Disney’s IPL rights “were transformed into a symbolic representation of streaming wars,” Wells Fargo analyst Steven Cahall wrote before the reports. of the winning bids.
He noted that investors should “decide whether DIS overpays with a winning bid or waives rights to streamline the broadcast economy, but potentially jeopardizing Hotstar’s under-orientation,” although he thought that “l IPL rights focus is too spectacular. ”
“The impact of the EPA on a loss-making offer is minimal even with a large premium, while the impact on subscribers of not renewing rights is also not a stock move,” he continued in a note. to customers last Thursday.
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Following reports earlier this week on Viacom18’s winning bid for IPL’s streaming rights, Doug Creutz of Cowen & Co. he wrote that Disney’s decision to move away was “prudent in terms of its P&L.” [profit and loss]but it will also make it harder for them to reach their goal of Disney + subscribers in fiscal year 24. “
He added that television rights, which Disney retained, “are significantly more monetizable with steady growth in ad sales relative to the more speculative growth of digital.”
Shares of Disney have fallen 2.0% in Tuesday afternoon trading and are well on their way to recording their eighth consecutive trading day of falls. This would mark the company’s longest streak of losses since the eight-session period ended July 28, 2016, according to Dow Jones Market Data.
Shares have fallen 39.4% so far, while the Dow Jones Industrial Average DJIA
has fallen by 16.5%.