Disney Loses Billions After Massive Television Deal Collapses

in Disney, Television

Shocked Mickey Mouse next to a descending stock arrow

Credit: Disney/Canva, edited by ITM

The Walt Disney Company has lost billions in estimated value after the sudden collapse of a $1.4 billion deal with the massive Indian conglomerate Zee Entertainment Enterprises. This is terrible news for the House of Mouse, which is desperately trying to close a merger with the country’s largest media company to cut its losses.

Walt Disney Castle logo with Mickey Mouse looking aghast
Credit: Disney/Inside the Magic

This could not come at a worse time for the company, which has faced dwindling box office grosses, massive layoffs, huge legal battles with the governor of Florida, and currently, a critical proxy battle for control of the company against a vengeful billionaire. Although Disney remains a hugely powerful corporation and cultural icon, its finances have not been in worse shape in decades.

It is being reported that Zee Entertainment has abruptly canceled a deal to acquire TV broadcast rights for the International Cricket Council for four years, with the American company retaining streaming rights for Disney Star (per Reuters). The deal was estimated at a staggering $1.4 billion of payments to the American company, which very much needs that revenue. At the very least, it demonstrates how the company cannot seem to find a firm foothold in the very valuable Indian market no matter what it does.

Social media is already ablaze over the dropped deal. Twitter’s @IndianSportsOTT reports: “A ZEE official has told Reuters that they are not in a position to pay the fee of $1.4bn for ICC TV rights as ZEE signed that agreement only on the hopes of its merger with Sony. Now, since the merger is called off, Disney Star is obligated to show all ICC events on TV.”

Indian team playing Cricket
Credit: Flickr/It’s No Game

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Investors recently got a bad feeling about the future of Disney Star when Zee Entertainment failed to make its initial $200 million payment on the deal, which seems to have been a sign of things to come. This also comes just after Zee Entertainment and Sony failed to come to terms with a merger that was years in the making, but now seems to be just another financial debacle.

In the wake of Disney Star losing its deal with Zee Entertainment, another huge Walt Disney Company enterprise is suddenly at risk. The company has been in weeks of discussion with Reliance Industries Ltd., India’s largest media company, to merge the House of Mouse’s entertainment arm in that country. After years of attempting to turn Disney Star into India’s biggest streaming platform, it seemed that Disney was ready to sell out to Reliant Industries and take a minority stake in the operation.

Bob Iger with Disney+ in the background
Credit: Inside the Magic

Unfortunately, according to Bloomberg, the missed payment by Zee Entertainment and the collapse of the billion-dollar International Cricket Council has caused the India unit of Disney to plummet to less than half its previous estimated value. That is a historically staggering drop, particularly for a company that stands as one of the most prominent corporations in the world.

Twitter’s @aryap speculates how this might affect the broader streaming market in Asia: “With Reliance gobbling up Disney Star & Sony calling off the merger with Zee, the only competition to Jio’s streaming platform could be people watching CCTV footage #OTT #CTV #Streaming

Related: Disney+ Axes First Show of 2024 Amid India Merger

Prior to this new development, the merger was reportedly being pursued with the understanding that Disney’s operations in India were worth about $10 billion. Now, the India unit is valued at $4.5 billion, a huge decline and a major obstacle to the Reliant Industries deal.

It may be that this huge drop in estimated values will put the kibosh on the deal or will simply lead to yet more negotiations between the two media behemoths. For Disney was already planning on taking a minority 40% stake in the merged company, but could this mean that it has to give up even more control to even get a piece of the market?

India is currently the world’s biggest market for streaming subscribers, a resource that Disney absolutely needs to clinch to secure its financial future. That future is getting a whole lot more risky.

Inside the Magic reached out to Disney and Zee Entertainment for comment, but has not heard back by the time of publishing.

Why do you think Disney is in such financial decline? Tell us your theories in the comments below!

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