Disney hints towards selling its linear TV businesses

New Delhi: Walt Disney CEO Bob Iger on Thursday hinted toward selling the linear assets of the company citing challenges faced by them.

Iger, in an interview with CNBC Global, emphasised the significant challenges faced by Disney upon his return to the company, noting that the disruption of linear businesses has been greater than anticipated.

He highlighted that there is a need to ensure that Disney's cost structure reflects the economic realities of the evolving media landscape.

"The challenges we faced were greater than I anticipated. We had to confront the disruption of our linear businesses, which was more severe than I was aware of," he said.

Further, Iger said, "We had to ensure that our cost structure reflects the economic realities of our industry. Transformative work is dealing with businesses that are no growth businesses and what to do about them, particularly the linear business, which we are expansive in our thinking about and we're going to look expansively about opportunities there because clearly it's a business that is going to continue to struggle." 

When asked if it was possible for Disney to look to sell the struggling business, Iger said, "We're going to be expansive. I think you can interpret what that word means. We're just getting at that work but we have to be open-minded and objective about the future of those businesses."

He also said, "the distribution model, the business model that forms the underpinning of that business and that has delivered great profits over the years is definitely broken and we have to wait and we have to call it like it is and that's part of the transformative work we're doing."

Iger returned to Disney in 2022 less than a year after his retirement and is leading the media giant.

Disney Star's prominent liner businesses include Star India, which houses a bouquet of entertainment and sports channels. It also operates OTT platform Disney+ Hotstar.

Disney Star is a prominent media conglomerate that operates more than 70 TV channels in eight languages, reaching the majority of cable and satellite TV households in India.

On Wednesday, a highly-placed industry source had informed that Walt Disney Co is exploring options to find a partner for the TV and digital business of Star India.

Some initial talks have happened to find a joint venture partner or sale of business, which are currently at a very nascent stage, for finding a right partner for Star India, which is struggling here after a poor show in the recently concluded IPL.

The discussions are happening at the global level at Walt Disney's headquarters, the source added.

This season, Star India had only TV broadcast rights for the T20 cricket tournament, while the streaming rights were with Viacom18.

Viacom18, jointly owned by billionaire Mukesh Ambani-led Reliance Industries and Paramount, streamed all matches on its OTT platform JioCinema.

According to experts, this dented the subscriber base of its OTT platform Disney+ Hotstar in India.