Star India, an Indian media conglomerate and a wholly owned subsidiary of Walt Disney, has reported an operating loss of $60 million for the third quarter ended June 28, 2019, due to increase in rights costs related to the Indian Premier League (IPL) and ICC Cricket World Cup 2019.
"The Indian TV giant Star India had posted operating profit of $150 million in the same quarter last year," The Walt Disney Company said in its earnings release.
The Star India losses have affected Walt Disney earnings as the US-based mass media and entertainment conglomerate posted 59 per cent decline in diluted earnings per share (EPS) from continuing operations for the quarter to $0.79 from $1.95 in the prior-year quarter.
The revenue, however, rose by 33 per cent to $20,245 million versus $15,229 million in the same quarter last year.
Commenting on Q3 earnings, Disney Senior EVP & CFO Christine McCarthy said that Star India's Q3 result was significantly lower than expectations.
McCarthy said, "As you know, results at Direct-to-Consumer and International (DTCI) reflect ongoing investment in our direct-to-consumer businesses, and this quarter also included an operating loss at Star of about $60 million. We estimate Star generated about $150 million of operating income in the third quarter last year."
"Star's results this quarter came in well below our expectations and were driven primarily by a meaningful step-up in rights cost for the quadrennial Cricket World Cup and the Indian Premier League as revenue growth was more than offset by the incremental rights expense," she added.
For Disney's media networks business, which includes ESPN, revenue jumped 21 per cent to $6,713 million in Q3, while the segment's operating income rose 7 per cent to $2,136 million, due to the consolidation of 21CF businesses (primarily the FX and National Geographic networks) and an increase at ESPN.
"The increase at ESPN was due to higher advertising and affiliate revenue, partially offset by an increase in programming and production costs. Higher advertising revenue was due to increases in units sold and rates, partially offset by lower viewership," The Walt Disney Company said in the SEC filing.
Edited by Chitranjan Kumar