RIL shows epic deal-making prowess, brings Disney India valuation down by 75%

Seven years after Rupert Murdoch sold Star India to The Walt Disney Company at a valuation of USD 14 billion, Disney sold the same India business to Mukesh Ambani’s Reliance Industries Limited at a valuation of USD 3.5 billion.

Just a few months back, Disney expressed its intent to exit India business at a valuation of USD 10 billion and got into talks with RIL.

Showing its deal-making prowess, RIL brought down the valuation by more than 65 per cent.

Effectively, Star India saw a decline of 75% in its valuation in 7 years.

Besides the liabilities Disney Star had in the form of media rights of ICC events and IPL, a lot went into play behind the massive dip in its valuation.

Industry observers believe that because of the liabilities against media rights for sporting events, largely attributed to RIL’s aggressive behaviour, the India business itself had turned into a liability for The Walt Disney Co.

“Walt Disney was relying heavily on Hotstar for its global business outlook and the 2022 IPL auction proved to be costly for the global content giant. It was widely reported that they had a plan B but they failed to read the India market. And the rest was taken care of by Reliance’s aggression,” said a senior media executive requesting his anonymity.

“Even though Star India remains an undisputed leader in the TV business with modest growth in terms of revenue, Disney’s compulsion was managing its global outlook and shareholders who were showing signs of desperation every passing day. RIL’s dealmakers Manoj Modi and Uday Shankar, who was a Disney insider until a few years ago, made most of it,” the executive added.

Jointly, Walt Disney Co and Reliance Industries JV will create an $8.5 billion (Rs 70,000 crore) behemoth.

In the JV, Reliance and its affiliates will hold 63.16 per cent while Disney will hold the remaining 36.84 per cent, as per the announcement made on Wednesday.

Reliance has also agreed to invest around Rs 11,500 crore in the joint venture to grow the OTT business.

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

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