Star India posts losses of Rs 12,548 cr, blames ICC media rights deal

Star India, owned by Walt Disney and soon to be merged with Mukesh Ambani’s Viacom18 under Reliance Industries, reported a standalone net loss of Rs 12,548 crore for the financial year that ended on March 31. This was a significant decline from the company’s standalone net profit of Rs 1,465 crore in the last financial year.

Operating revenue also saw a decline, dropping over 6 percent to Rs 18,587 crore from Rs 19,812 crore. Advertising revenue fell by 4 percent to Rs 10,736 crore, while subscription revenue decreased by over 1 percent to Rs 6,909 crore, a report in the Economic Times stated.

The company attributed its weak financial performance to a provision of Rs 12,319 crore for an “onerous contract” related to the International Cricket Council (ICC) media rights deal.

Star India had secured the ICC TV and digital rights for $3 billion for a four-year period until 2027. However, the company sub-licenced the TV rights to Zee Entertainment, which later backed out of the deal after the collapse.

In a regulatory filing, Star India said, “The company has estimated the contract with ICC, to be onerous as the expected revenue from customers relating to this right as and when the related event is broadcasted/ streamed is likely to be less than the cost involved in broadcasting and streaming these events and hence has estimated a loss from future events relating to these media rights to be Rs 12,319.31 crore as of March 31 2024.”

The TV rights sub-licensed by the company to Zee Entertainment were eventually not pursued after the collapse of its merger pact with Sony Group Corp’s India units in January. Zee faced financial constraints that prevented significant investment in the expensive cricket property of ICC rights.

Due to financial limitations, Zee was unable to secure approval for investing in ICC rights. Subsequently, Star India commenced arbitration proceedings against Zee at the London Court of International Arbitration, seeking $940 million in damages.

Star has filed for arbitration proceedings against the company led by Punit Goenka at the London Court of International Arbitration, seeking $940 million in damages, mirroring Zee’s earlier actions. In a regulatory filing in September, Zee contested Star’s claims by stating that the arbitration process was still in its initial phase and that the company’s liability had not been determined by the LCIA.  Business Today