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ICC Cricket World Cup brings Disney Star $315 million loss

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Disney Star’s sports segment saw its operating loss balloon 144% to $315 million (Rs 2,583 crore) as of December 2023 from $129 million (Rs 1,057 crore) in the year-ago quarter on account of higher rights costs from airing of the ICC Cricket World Cup, as per The Walt Disney Company’s quarterly results declared on Thursday.

India was the exclusive host of the 2023 edition of the ICC Cricket World Cup in which 10 teams played 48 matches between October 5 and November 19, 2023. Disney Star, which held the ICC TV and digital media rights till 2023, broadcast the matches on its Star network of channels.  It also streamed the matches for free on its Disney+ Hotstar app to compete with Reliance Industries-backed JioCinema which streamed the IPL cricket matches for free in 2023.

As per the company’s first quarter results, Star India’s revenue in the sports segment rose 71% to $399 million during October-December 2023 from $233 million in the year-ago quarter, but its operating loss zoomed to $315 million from $129 million during the period.

The press release highlighting the earnings said: The increase in operating loss at Star was due to the airing of the ICC Cricket World Cup in the current quarter compared to the ICC T20 World Cup in the prior-year quarter, which resulted in (a) An increase in programming and production costs attributable to higher average costs per match and more matches aired and (b) Advertising revenue growth due to more units delivered and an increase in average viewership, partially offset by a decrease in rates.

Walt Disney Company’s overall sports revenue rose 4% to $4.8 billion and its overall operating loss in sports in Q1 FY24 declined 37% to $103 million from $164 million in the year-ago fiscal.

“(Disney’s overall) Sports operating income improved versus the prior year due to strength at ESPN, partially offset by lower results at Star India, driven by higher rights costs from airing of the ICC Cricket World Cup,” the management said in the earnings call.

The once-in-four-year tournament was estimated to have brought in Rs 2,000-Rs 2,200 crore in combined ad revenue on TV and digital platforms compared to the Rs 1,350 crore it did four years ago in the 2019 edition. 

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India hosted the coveted tournament after a gap of 12 years. It was the first time India was the exclusive host.  In 1987, it hosted it with Pakistan, in 1996 with Pakistan and Sri Lanka, and in 2011 along with Sri Lanka and Bangladesh. Australia won the 2023 edition of the tournament.

source by: Business Today News

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