Disney projects $300 mn equity loss in FY25 from India JV with Reliance

Mint

07-05-2025

Media and entertainment conglomerate Walt Disney Company has projected an equity loss of approximately $300 million for FY25 from its India joint venture with Reliance Industries Ltd, primarily driven by purchase accounting amortization.
The joint venture, formalized on 14 November 2024, combined Disney's Star-branded general entertainment and sports channels and its Disney+ Hotstar streaming service with the media assets controlled by Reliance. The Mukesh Ambani-owned firm holds a 56% controlling stake in the joint venture, Disney retains 37%, and an investment firm holds the remaining 7%.
With this restructuring, Disney no longer consolidates Star India's results in its financials. Instead, it reports its 37% stake in the JV under 'Equity in the income of investees.' This shift led to a sharp drop in international operating income, which fell 84% year-on-year in Q2 FY25—from $92 million to $15 million—due to the exclusion of Star India's contribution. Disney follows October to September fiscal year.
For the second quarter ended 29 March, Disney reported a 7% increase in total revenues to $23.6 billion, driven by a strong performance in its entertainment and experiences segments, according to its earnings report released Wednesday. The entertainment segment posted $1.3 billion in operating income, up $500 million from a year earlier. Linear networks' operating income grew 2% year-on-year, but the company clarified this comparison includes $89 million in operating income from Star India in Q2 FY24, which is no longer present this year.
The company also noted subscription revenue growth from its direct-to-consumer (DTC) platforms like Disney+ and Hulu, driven by higher prices and more subscribers. However, this was partially offset by foreign exchange headwinds and the absence of Star India's DTC revenues in the current quarter.
Disney also recorded $109 million in content impairment charges in Q2 FY25, while the same quarter a year earlier had seen a massive $2.05 billion in goodwill impairments, largely linked to Star India and its linear networks business. Meanwhile, income from equity investees dropped to $36 million from $141 million a year ago, reflecting the India joint venture losses.
The India JV now combines Reliance's Viacom18 network (with channels like Colors and Sports18) and Disney's Star network (including Star Plus, Star Gold, and Star Sports) under a single umbrella. On the streaming front, the JV brings together JioCinema and Disney+ Hotstar, creating a digital powerhouse with a combined reach of over 750 million viewers in India.
The combined Reliance-Disney streaming entity is three to four times bigger than the likes of Netflix in terms of total hours of programming and may even look at acquiring smaller, niche language-specific entities that are struggling to survive, according to industry experts. Their total paid subscriber base of 250 million is far higher than the estimated 12 million for Netflix and Prime Video each.