Credit: Inside the MagicDisney Star is taking legal action against a massive media conglomerate in India, a region of the world in which the Mouse seems to have nothing but trouble.
India recently surpassed China to become the world’s largest market of entertainment consumers, making it a prized area for any media company to try to corner. With every major studio currently pivoting to streaming content, that means that Disney has tried to get Indian subscribers hooked on Disney+ (known Star in the subcontinent)m, Amazon has pushed Prime Video, Warner Bros. Discovery has tried to make Discovery+ a thing, and Netflix has marketed, well, Netflix.
Related: UPDATE: Disney Officially Sells Itself to Indian Mega-Corporation
It has not been going well for the Walt Disney Company. The Mouse House has struggled to establish a consistent consumer base in India, with its strategy hinging on the broadcast rights for cricket, the country’s most popular sport, by a huge margin. Until recently, it seemed that Disney was finally gaining some ground, as it planned to license the TV broadcast rights to the International Cricket Council to Zee Entertainment while retaining streaming rights for Disney Star.
Then that deal, which involved some $1.4 billion worth of payments to Disney, abruptly collapsed. The fallout was tremendous, causing Disney to lose billions of estimated market value on the eve of an even bigger business merger (which we’ll get into in a moment). Zee Entertainment defaulted on its first payment, which is reported to have been in the region of $200 million, and now says that it is simply not in the financial position to follow through.
As one might expect, Disney is not very happy about this. Per Reuters, the company has initiated arbitration proceedings against Zee Entertainment, seeking “specific performance” or payment in the form of damages for not living up to the contract. In a wild legal swing, Zee also believes that Disney Star has breached its cricket broadcast contract in some unspecified way and is seeking damages itself.
Related: Disney Prepares To Sell Off Failing TV Network
At the same time as Disney is figuring out what to do about Zee Entertainment, cricket digital rights, and what damages it can pursue, it is also attempting to close a merger with Reliance Industries, the most powerful company in India. Basically, Disney has announced that it is selling off its media interests in India to Reliance (which has interests in everything from retail to petrochemicals to entertainment) and taking a minority stake in the new joint venture.
Hopefully, before Disney pulls out, it can get some damages back from Zee.
Why has Disney failed so hard in India? Give us your thoughts in the comments below!