Star India Sees 6% Dip In Operating Revenue In FY24

Walt Disney-owned Star India witnessed a 6 per cent drop in its operating revenue in the financial year 2024 (FY24) as it dipped to Rs 18,587 crore from Rs 19,812 crore in the last year. The company reported a standalone net loss of Rs 12,548 crore in FY24, as compared to a net profit of Rs 1,465 crore last year.

The expenses of the company surged by over 68 per cent and increased to Rs 31, 548 crore from Rs 18,724 crore, mainly due to the provision for the contract.

It has attributed this substantial loss to a provision of Rs 12,319 crore for an ‘onerous contract’ related to the International Cricket Council (ICC) media rights deal, the company stated in a regulatory filing. The company stated that it expects the revenue from customers for ICC events, as and when the related event is broadcasted or streamed to be less than the cost involved in broadcasting and streaming these events.

This led the company to estimate a future loss on these media rights totalling Rs 12,319.3 crore as of 31 March 2024. The company noted that these could change depending on various uncertainties. The ICC TV and digital rights for a four-year period till 2027 were initially acquired by the company for USD 3 billion.

The company later sublicensed the TV rights to Zee Entertainment, which, after the collapse of its planned merger with Sony Group Corp’s India units in January, backed out from the deal. Zee cited financial constraints which prevented it from making such investment.

Following this, Star initiated arbitration proceedings against Zee’s parent company at the London Court of International Arbitration (LCIA) seeking USD 940 million in damages. Zee, in its September filing, had refuted Star’s claims by stating that LCIA had yet to determine the company’s liability as the arbitration process was still in its early stages.