For fiscal year 2024, Walt Disney reported a non-cash impairment charge of $1.5 billion categorized under restructuring and impairment expenses associated with the Star India transaction. The charge reflects a fair value adjustment of the Star India business. Disney operates on a financial calendar running from October to September.
Walt Disney disclosed in a regulatory filing, that the $1.5 billion impairment includes non-cash cumulative foreign currency translation losses of approximately $800 million. The company further stated that related to the completion of the transaction between Star and Reliance Industries Limited’s (RIL) Viacom18 it would record a non-cash tax charge of around $300 million.
Walt Disney said, “Star India’s assets and liabilities are classified as held for sale in the consolidated balance sheet as of September 28, 2024, and we recorded $1.5 billion of non-cash impairment charges in ‘restructuring and impairment charges’ in fiscal 2024 to reflect Star India at its fair value less costs to sell.”
It further added by saying, “The measurement of these impairment charges included non-cash cumulative foreign currency translation losses of approximately $0.8 billion. In addition, in the first quarter of fiscal 2025, we anticipate we will recognise a non-cash tax charge of approximately $0.3 billion in connection with the close of the transaction.”
On November 14 the merger between Reliance Industries Limited (RIL) and Disney to integrate the assets of Star India and Viacom18 was finalized. With RIL holding a 56% majority stake the newly formed entity, JioStar, is valued at $8.5 billion, in which Disney retains a 37% share, while Bodhi Tree Systems, an investment firm, owns the remaining 7%.
Notably, Disney will account for its 37% stake in the joint venture following the completion of the merger, at fair value on its balance sheet. The company will report its share of the joint venture’s earnings under “equity in the income of investees, net,” instead of including it in the operating results of its segments.
For the financial year ending March 31 Star India, previously a wholly-owned subsidiary of Walt Disney, reported a standalone net loss of ₹12,548 crore. The company attributed the significant loss to a ₹12,319 crore provision for an “onerous contract” related to its media rights agreement with the International Cricket Council (ICC) in a regulatory filing.
Star India’s sports division experienced a 47% rise in operating losses, amounting to $636 million according to Walt Disney’s fiscal 2024 filings. However, the business saw a 15% revenue growth, reaching $841 million, fueled by a 40% increase in sports advertising revenue, which climbed to $444 million.
The revenue growth was primarily driven by the broadcast of two major ICC cricket tournaments during the year, compared to one in the previous year. However, affiliate revenue dropped by 13% to $238 million, impacted by lower effective rates and a reduced subscriber base.