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The Walt Disney Company gets a reprieve in India with a new cricket contract

The Walt Disney Company (NYSE:DIS) has slammed its way into India with a new deal estimated to be worth more than US$1.4 billion to broadcast all Cricket World Cups from 2024 to the end of 2027, after losing broadcasting rights. to the Indian Premier League (IPL), the most watched cricket league in India.

As part of the four-year deal with the International Cricket Council (ICC), its Disney Star arm will broadcast all ICC tournaments in India, including the Men’s and Women’s T20 World Cup, Cricket World Cup and the Champions Trophy.

No official figures have been reported on the bid, but it is expected to exceed the $1.44 billion benchmark set by the ICC.

Based on the previous eight-year offer at US$1 billion, the current deal (for half the period) is at least 44% higher in dollars or 92% higher in rupees.

The next men’s and women’s T20 world cups will take place in 2024 and 2026, with the women’s 50+ world cup in 2025 and the men’s tournament in 2027. The men’s champions trophy will take place in 2025 and the women’s in 2027.

A record 167 million people watched the ICC Men’s T20 World Cup in 2021, with the ICC saying Disney’s deal resulted in “a significant increase in rights fees compared to the previous cycle”.

Earlier this summer, Disney came under fire after losing streaming rights to the IPL, potentially dealing it a major blow of around 20 million fewer subscribers, while management also faced this month this to further pressure from an activist investor in the form of Daniel Loeb.

It was a rare blemish in an otherwise clean notebook since the start of the pandemic, with the Burbank-based media giant earlier this month reporting a 26% revenue surge as its parks division themed and experiments brought in record results, while its streaming numbers topped Netflix for the first time.

Analysts have long said there are plenty of opportunities for Disney to put more emphasis on its streaming services.

Disney’s long-term prospects hinge heavily on its streaming business, which recently lowered its subscriber growth forecast to between 215 million and 245 million by fall 2024, from 230 million to 260 million previously.

Just a few months ago, chef Bob Chapek called the initial goal “very achievable”.

But a large, digital-first audience is becoming increasingly important to Disney+ as subscription growth matures in the United States.

Losing the IPL deal meant missing out on a league that drew more than 600 million viewers last year, with its recent media package valuing each game at US$15 million.

That’s more than the English Premier League’s US$11 million, it’s still below the NFL average of US$17 million per game.

Paid subscribers for Disney’s HotStar unit, which will show ICC games, are worth just 76 cents a month compared to US$8 in the US, but India’s 1.4 billion potential streamers remain. a key growth driver.