PTI

Walt Disney Co and Reliance Industries on Wednesday announced signing of binding pacts to merge their media operations in India to create a Rs 70,000 crore behemoth.

Reliance and its affiliates will hold a 63.16 per cent stake in the combined entity that will house two streaming services and 120 television channels. Disney will hold the remaining 36.84 per cent stake, the companies said in a statement.

Reliance has also agreed to invest at closing Rs 11,500 crore into the joint venture to give it muscles to fight rivals such as Japan's Sony and Netflix.

Disney+Hotstar has seen its paid subscriber base decline from around 55 million to about 40 million in the first quarter of this financial year because of Reliance's Jio Cinemas winning exclusive rights for live sports.

The combined entity will have the largest OTT subscriber base and close to 120 channels in the country.

Media ventures of Reliance are currently housed in Network 18, which owns TV18 news channels as well as a plethora of entertainment (under the 'Colors' brand) and sports channels.

Besides, NW18 has stakes in moneycontrol.com, bookmyshow and also publishes magazines. It also owns the news channels CNBC/CNN. Reliance separately owns a movie production arm - JioStudios - and majority stakes in two listed cable distribution companies, Den and Hathway.

Disney+Hotstar was launched in India in 2020, post the acquisition of the entertainment assets of 21st Century Fox at a valuation of USD 71.3 billion, thereby taking over the operations of Star India and Hotstar. It housed entertainment and cinema channels such as StarPlus and StarGold as well as sports channels like Star Sports.

While Disney+Hotstar rapidly increased their subscriber base initially with the streaming rights of cricket matches (IPL, World Cup), it lost the bid for the digital streaming rights in 2023-27 cycle, which was won by Reliance-backed Viacom18 for USD 720 billion, 12.92 per cent higher than what Star India had paid on an average per match value.

Nita Ambani, wife of billionaire and Reliance chairman Mukesh Ambani, will head the joint venture while Uday Shankar will be the vice chairperson.

Shankar is a former top Disney executive and has a joint venture with James Murdoch, called Bodhi Tree.

"Reliance Industries Ltd (and its affiliate) Viacom 18 Media Pvt Ltd and The Walt Disney Company today announced the signing of binding definitive agreements to form a joint venture that will combine the businesses of Viacom18 and Star India," the statement said.

"As part of the transaction, the media undertaking of Viacom18 will be merged into Star India Private Limited (SIPL) through a court-approved scheme of arrangement," it added.

The transaction values the joint venture at Rs 70,352 crore (USD 8.5 billion) on a post-money basis, excluding synergies.

"Disney may also contribute certain additional media assets to the joint venture, subject to regulatory and third-party approvals," it said without elaborating.

The joint venture will be one of the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together iconic media assets across entertainment (e.g. Colors, StarPlus, StarGOLD) and sports (e.g. Star Sports and Sports18) including access to highly anticipated events across television and digital platforms through JioCinema and Hotstar.

The joint venture will have over 750 million viewers across India and will also cater to the Indian diaspora across the world.

"The combination of the media expertise, cutting-edge technology and diverse content libraries of Viacom18 and Star India will allow the joint venture to offer more appealing domestic and global entertainment content and sports live streaming services, while delivering an innovative and convenient digital entertainment experience at affordable prices.

"With the addition of Disney's acclaimed films and shows to Viacom18's renowned productions and sports offerings, the joint venture will offer a compelling, accessible and novel digital-focused entertainment experience to people in India and the Indian diaspora globally," it said.

The joint venture will also be granted exclusive rights to distribute Disney films and productions in India, with a license to more than 30,000 Disney content assets, providing a full suite of entertainment options for the Indian consumer.

Speaking about the merger, Mukesh D Ambani, Chairman & Managing Director of Reliance Industries, said, this is a landmark agreement that heralds a new era in the Indian entertainment industry.

"We have always respected Disney as the best media group globally and are very excited at forming this strategic joint venture that will help us pool our extensive resources, creative prowess, and market insights to deliver unparalleled content at affordable prices to audiences across the nation. We welcome Disney as a key partner of Reliance group," he said.

Bob Iger, CEO of The Walt Disney Company said, "India is the world's most populous market, and we are excited for the opportunities that this joint venture will provide to create long-term value for the company".

"Reliance has a deep understanding of the Indian market and consumer, and together we will create one of the country's leading media companies, allowing us to better serve consumers with a broad portfolio of digital services and entertainment and sports content," he added.

Uday Shankar, who is the co-founder of Bodhi Tree Systems, said this joint venture is poised to shape the future of entertainment in India.

The transaction is subject to regulatory, shareholder and other customary approvals and is expected to be completed in the last quarter of calendar year 2024 or the first quarter of 2025.

(Except for the headline, this story, from a syndicated feed, has not been edited by Odishatv.in staff)

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