Here's Why KeyBanc Considers Disney's IPL Rights Win As Neutral Outcome

  • KeyBanc analyst Brandon Nispel sees Walt Disney Company DIS winning TV IPL rights as a neutral outcome for DIS.
  • Nispel would have liked DIS to pursue Digital rights over TV rights, given the ongoing secular challenges of PayTV. 
  • However, there appear to be some benefits due to the importance of IPL to the Star ecosystem. 
  • On the one hand, DIS controls the rights to the IPL property that likely should have the highest viewership implying its ability to monetize the rights fairly effectively through advertising. 
  • Additionally, DIS can use the more extensive Pay-TV base of customers as a gross add funnel for Disney+ Hotstar. 
  • Lastly, Disney+ Hotstar will likely have some incremental churn as 3- month/annual plans lapse though long-term churn for Disney+ Hotstar should be less seasonal around the completion of IPL. 
  • On the other hand, TV viewership is shifting broadly from linear Pay TV to streaming, where it remains likely that the digital subscriber base will be greater than the Pay TV base by the end of the contract. 
  • He appreciated DIS's unwillingness to be overly aggressive on the digital rights, given DIS likely has at least one year of data on Disney+ Hotstar IPL viewership, which probably puts it in a more informed position than competing bids. 
  • He sees rights for Viacom18 as slightly positive to Paramount Global PARA.
  • India will likely be incremental to Paramount+'s 100 million subscriber target by 2024. 
  • Price Action: DIS shares traded higher by 1.32% at $95.46 on the last check Wednesday.

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