Disney CEO Bob Iger on Reliance deal: It’s kind of the best of both worlds
Bob Iger said, "We have a very good partner in Reliance, and we get to have a chance of growing a business and lowering the risk of doing so."
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The Walt Disney Company's chief executive Bob Iger said that the $8.5 billion Indian media merger deal with Reliance Industries is the “best of both worlds” for the entertainment giant.
“We wanted to stay in India. We made a big investment in India when we purchased the assets of 21st Century Fox. We’re one of the biggest media companies in India. But even though it’s the most populous country in the world, and we felt we wanted to be there because of that, we also know that there are challenges in that market,” Iger said at a Morgan Stanley investor conference on March 5. Moneycontrol reports.
On February 28, Reliance Industries announced a joint venture with Disney, which combines the businesses of Viacom18 and Star India to create one of India’s largest TV and digital streaming platforms.
RIL and its group companies will own a controlling stake in the entity and invest Rs 11,500 crore ($1.4 billion) for its growth strategy. The merged entity will have a valuation of Rs 70,352 crore ($8.5 billion) on a post-money basis.
The combined entity will capture about 85 percent of India’s video-streaming audience, according to analysts at brokerage firm Bernstein. Once the deal is completed, two of India’s largest streaming platforms - Disney+ Hotstar and JioCinema will have a single owner.
Iger said the transaction would allow the US entertainment giant to own a part of a bigger media company in India, one of the world’s fastest-growing media and entertainment markets.
“It’s kind of the best of both worlds. We stay in the market at a significant level. We have a very good partner in Reliance, and we get to have a chance of growing a business and lowering the risk of doing so,” he said.
The blockbuster merger between Reliance and Disney's Indian media assets is not only set to transform the content library for the audience but also create a powerhouse for advertisers to park their ad dollars with assured return on investments.
“We believe the merger of Viacom18 and Star India will have a big impact on the entire M&E ecosystem as the combined entity will command a huge market share. The merger will create a large media juggernaut with 108+ channels (Star India has 70+ TV channels in 8 languages whereas Viacom has 38 TV channels in 8 languages), two large OTT apps (Jio Cinema and Hotstar) and two film studios (one each of Reliance and Disney India),” said Karan Taurani, senior vice president at Elara Capital.
The combined strength of TV and digital for these premium cricket IPs is naturally expected to do wonders when it comes to AdEx boost for the company.
