ICC rights may bleed Disney's streaming entertainment biz
Walt Disney's maiden profit from streaming entertainment in Q2 may be short-lived as the segment is expected to experience a Q3 loss due to International Cricket Council (ICC) digital rights, which are held by Disney+ Hotstar.
«We are forecasting a loss for entertainment direct to consumer (DTC) in the third quarter, the vast majority of which is due to Disney+ Hotstar's ICC cricket rights,» Walt Disney CFO Hugh Johnston told analysts during the earnings call for the March quarter.
He added Disney+'s core subscriber growth is not expected to be significant in Q3, but sub-growth is anticipated to return in Q4.
Walt Disney's streaming entertainment services, comprising Disney+ and Hulu, recorded a maiden profit of $47 million in Q2. The company's sports streaming service, comprising ESPN+, reported a $65 million operating loss.
The aggregate operating loss from the streaming portfolio including entertainment and sports stood at $18 million during the quarter.
Walt Disney CEO Bob Iger, who was brought back in November 2022 to shepherd the company out of difficulty, said the company expects a weaker Q3, owing in large part to the seasonality of Indian sports rights.
«We fully expect streaming to be a growth driver for the company in the future, and we have prioritised the steps necessary to achieve this,» he noted.
Star India, which is the parent company of Disney+ Hotstar, has paid $3 billion for the ICC media rights until 2027. The value of ICC TV and digital rights is split almost equally.
The ICC TV rights
