American entertainment giant Walt Disney expects to incur $300 million in equity losses from its Indian joint venture with Reliance in fiscal year 2025, the firm said in its first-quarter earnings on February 5. The loss is on account of purchase accounting.
In the first quarter (October–December), Disney said equity loss from the India JV stood at $33 million. The company began recognising its share of the India JV as “Equity in the income of investees” in November and published the first deconsolidated figures of Star India.
Disney and Reliance Industries Limited (RIL) have formed a joint venture in India, combining the company's Star-branded entertainment and sports channels, Disney+ Hotstar service, and RIL-controlled JioCinema.
Reliance holds a 56% controlling stake, while Disney retains 37%, and Bodhi Tree holds 7%.
Disney's Q1 results include about one and a half months of Star India's operating results.
Sports Segment Helps Lift Earnings
Disney said its India business will contribute $73 million to entertainment segment operating income in fiscal 2025, lower than $254 million in the prior year.
Meanwhile, Disney's sports segment benefited from the ICC event, generating $9 million in operating income, compared to a $636 million loss in the prior year.
"The improvement in Star India’s operating results reflected the comparison to the ICC Cricket World Cup in the prior-year quarter," Disney said in its earnings report.
In sports, the firm's ESPN reported a 15% rise in operating income year-on-year to $228 million.
Overall, Disney’s net income increased nearly 23% to $2.64 billion from $2.15 billion during the same quarter last year. However, this came on the backdrop of the company reporting a 1% decline in subscribers for Disney+.
The company said it expects double-digit growth in operating income for the entertainment segment in fiscal 2025, with an increase in direct-to-consumer operating income of around $875 million.
