In its FY25 outlook, Disney anticipates double-digit percentage growth in segment operating income. This includes an increase of $875 million in entertainment Direct-to-Consumer operating income, partly due to a favourable comparison against a $200 million adverse impact from Disney+ Hotstar in India in the previous year.
Disney follows an October to September financial calendar.
Following the merger, Disney deconsolidated Jio Star from its financial results starting Q1. The company reported a $33 million equity loss from the India JV in Q1, primarily due to purchase accounting.Disney’s Q1 results included approximately 1.5 months of Star India’s operations, compared to a full year in fiscal 2024. From 14 November 2024, Disney began recognising its share of the India JV under “Equity in the income of investees.”
During the quarter, Disney recorded an impairment charge of $143 million and a non-cash tax charge of $213 million related to the Star India transaction. The after-tax income loss from the transaction stood at $356 million.
Jio Star, controlled by RIL with a 56% stake, also includes a 7% stake held by Uday Shankar and James Murdoch’s Bodhi Tree Systems.
For FY25, Jio Star is projected to contribute $73 million to Disney’s entertainment segment operating income, down from $254 million in the previous year, and $9 million to its sports segment, compared to a $636 million loss last year.
Disney and RIL completed their $8.5 billion India JV merger on 14 November 2024, combining Star and Viacom18’s TV and digital assets. For fiscal year ending March 2024, Star India had reported a standalone net loss of Rs 12,548 crore for the last fiscal year ended March 31 due to a Rs 12,319 crore provision for an “onerous contract” stemming from the International Cricket Council (ICC) media rights deal.
Disney recorded non-cash impairment charges of $0.1 billion in Q1 FY25 and $1.5 billion in FY24 under “Restructuring and impairment charges” to reflect Star India’s fair value. These included $0.8 billion in non-cash cumulative foreign currency translation losses (net of tax) and a $0.2 billion non-cash tax charge related to the transaction closure.
Disney’s international advertising and subscription revenue declined in Q1, primarily due to a 29% drop in advertising and a 14% decline in subscriptions at Star India.
Star India’s sports revenue plummeted to $39 million in Q1 from $399 million a year earlier due to the absence of cricket events. However, its sports segment recorded an operating profit of $9 million, reversing a $315 million loss in the previous year.
Disney+ Hotstar’s advertising revenue in India fell sharply to $15 million in Q1 FY25, down from $165 million in Q1 FY24.
