By In a recent financial report, Disney Star disclosed a staggering loss of $315 million in its sports segment, primarily attributed to the broadcasting of the ICC Cricket World Cup during the quarter ended December 30, 2023. This figure marks a significant increase from the $129 million loss incurred during the corresponding quarter of FY23, when the ICC T20 World Cup was aired.
The company cited several factors contributing to this substantial loss, including escalated programming and production costs resulting from higher average costs per match and an increased number of matches aired. Although advertising revenue experienced growth due to more units delivered and a rise in average viewership, this increase was partially offset by a decrease in advertising rates.
Insiders familiar with the matter revealed that Star India had allocated 40% of its payout, estimated between $1.8 to $2 billion, to the International Cricket Council (ICC) for the final year of its eight-year media rights deal, which concluded in 2023. Notably, 80% of this allocation was earmarked for linear TV rights, while the remaining 20% was designated for digital rights.
Despite Disney Star’s sports segment recording a revenue of $399 million, a notable 71% increase from $233 million in Q1 FY23, the operating loss in this segment for Q1 FY24 amounted to $103 million, reflecting a 37% decline from $164 million in the previous fiscal year.
The ICC Cricket World Cup, which was broadcast on Star Sports and streamed on Disney+ Hotstar at no charge, garnered significant viewership. Disney+ Hotstar observed a slight increase in paid subscriptions, with the paid subscription count reaching 38.3 million, up by 2% from 37.6 million in the quarter ending September 30, 2023.
During the earnings call, Disney’s CFO, Hugh Johnston, addressed concerns regarding the improper sharing of Disney Plus accounts. Johnston announced measures to mitigate this issue, stating, “Users suspected of such activities will now have the option to sign up for their individual subscriptions.” Additionally, Disney plans to introduce an option for account holders to add individuals outside their household for an “additional fee,” although specific pricing details have not been disclosed.
The financial report underscores the complexities and challenges inherent in sports broadcasting, particularly in the context of major tournaments such as the ICC Cricket World Cup. Despite the financial setback, Disney Star remains committed to delivering high-quality sports content and enhancing user experiences across its platforms.
