Disney Star incurs loss of $315 mn in sports segment due to ICC Cricket World Cup

The company attributed the loss to high cost of acquiring media rights and decrease in ad rates.  

Disney Star incurred a loss of $ 315 million in its sports segment due to the airing of the ICC Cricket World Cup in the quarter ended December 30, 2023. The loss was $129 million in the corresponding quarter of FY23, when ICC T20 World Cup was aired.

The company attributed the loss to an increase in programming and production costs attributable to higher average costs per match and more matches aired. Also while the advertising revenue grew due to more units delivered and an increase in average viewership, it was partially offset by a decrease in rates.

Sources familiar with the matter have revealed that Star India had allocated 40% of the $1.8-2 billion payout to the International Cricket Council (ICC) for the final year of its eight-year media rights deal, which was set to expire in 2023. Out of the 40% allocated to the final year of the rights cycle, 80% was reserved for linear TV rights, while the remaining 20% was set aside for digital rights.

From its sports segment, Disney Star earned a revenue of $399 million, up by 71% from $233 million in Q1 FY23. Walt Disney Company's sports revenue was up by 4% to $4.8 billion. However, the operating loss in sports in Q1 FY24 was recorded at $103 million, 37% down from $164 million last fiscal.

The World Cup was broadcast on Star Sports and streamed on Disney+ Hotstar for free. The streaming platform registered a paid subscription count of 38.3 million, up 2% from 37.6 million in the quarter ended on September 30, 2023.

Also Read: Disney+ Hotstar surpasses 38 million paid subscriptions in Q1, showing 2% growth over previous quarter

During the earnings call, Disney's CFO, Hugh Johnston, addressed the issue of improper sharing of Disney Plus accounts. He announced that users suspected of such activities will now have the option to sign up for their individual subscriptions. 

Disney will also start letting account holders add people outside their household for an “additional fee” — but it didn’t say how much that will cost.