Disney CEO Says Winning Auction For India's Top Cricket League Crucial But Its Business In The Country Won't 'Evaporate' Even With A Loss

Losing cricket streaming rights in India wouldn't tarnish Disney Corporation’s DIS guidance of 230 million to 260 million total paid Disney+ subscribers by end of FY 2024.

What Happened: The assessment was delivered by Disney CEO Bob Chapek at the company’s first-quarter earnings call.

Disney+ Hotstar, as Disney+ is known in India, makes up for about 40% of the company’s long-term guidance; Chapek was asked whether, without cricket, meeting the forecast would be tough.

Chapek noted that the Indian Premier League or IPL, a professional men’s Twenty20 cricket league, is an important part of Disney+ Hotstar’s content offering.

“While certainly, it's an important component, the local content that we're developing really will mitigate the impact of this if we were not to win the auction on IPL,” said Chapek.

Disney Chief Financial Officer Christine McCarthy said the company was not updating guidance. "We have that fiscal '24 guidance out in the marketplace, and we're sticking to it," said McCarthy.

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Why It Matters: Disney reported first-quarter revenue of $21.8 billion, an increase of 34% year-over-year. Earnings per share came in at $1.06 beating Street estimates of 61 cents per share.

Disney+ subscriber growth was 129.8 million, an increase of 37% year-over-year with 11.8 million subscribers added during the period.

Chapek said the company will try to extend its rights to the IPL; even if the company failed, it would stick to the Disney+ subscriber growth figures guided.

“We're very confident that even if we were not to go ahead and win that auction, we would still be able to achieve our 230 to 260 million.”

In 2019, Disney acquired Star India, which held the IPL broadcasting rights since 2017 and owned the streaming service Hotstar. The rights are auctioned every five years by the authorities, according to a Wall Street Journal report. 

Disney is competing for the rights against Sony Group Corporation NYQ arm Sony Pictures Networks India and Viacom CBS Inc VIAC-Reliance Industries joint venture firm Viacom18. 

Price Action: On Wednesday, Disney shares soared 6.6% higher at $157.01 in the after-hours trading. The shares ended the regular session 3.3% higher at $147.23.

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