Walt Disney reports equity loss of $300 million from India JV in FY25

The Walt Disney Company has reported an equity loss of $ 300 million in the first two quarters of FY 2025 stemming from its India joint venture with Reliance Industries Ltd (RIL).

The company, which released its financial results for the second quarter ending March 29, 2025, and for the six months of the year, reported a 7% year-over-year increase in total revenues which stood at $23.6 billion in Q2 FY25, up from $22.1 billion in Q2 fiscal 2024.

The company attributed this growth to improvements across several business segments, particularly in its entertainment operations.

In the entertainment segment, its operating income reached $1.3 billion, representing a $0.5 billion increase compared to the same quarter last year.

Within this, the linear networks division recorded a 2% rise in operating income.

“This year-over-year growth includes a comparison to $89 million of operating income contributed by Star India in Q2 fiscal 2024, which was part of Disney’s consolidated financials before the formation of a joint venture with RIL,” the company said.

As a result of the Star India joint venture, Disney recorded an equity loss of approximately $300 million in FY2025, primarily due to purchase accounting amortization, it said.

The Star India-RIL merger was finalized on November 14, 2024, marking the creation of a joint venture that combined Disney’s Star-branded and other general entertainment and sports television channels, along with the Disney+ Hotstar service in India, with certain media and entertainment assets controlled by RIL.

Under the terms of the agreement, RIL holds an effective 56% controlling interest in the joint venture, while Disney retains a 37% stake and a third-party investment firm holds the remaining 7%.

Following this transaction, Walt Disney ceased consolidating Star India’s results and instead began recognizing its 37% share of the joint venture’s performance under the "Equity in the income of investees" line item.

This restructuring had a noticeable impact on international operations as well.

According to the company, its international operating income dropped sharply from $92 million in Q2 FY2024 to just $15 million in the latest quarter, with the company attributing the decline to the Star India transaction.

Despite the restructuring, Disney saw growth in subscription revenue, driven by higher effective rates reflecting price increases and a growing subscriber base.

However, this growth was “partially offset by unfavourable foreign exchange impacts and the absence of Star India subscription revenue” in the current quarter due to the transfer of control, it said.

In the sports segment, Star India’s revenue, which was reported at $105 million in Q2 FY2024, was left blank for Q2 FY2025.

“The operating loss in Star India in the prior-year quarter reflected Indian Premier League cricket programming,” it said.

In Q2 FY24, Star India had shown an operating loss of $ 27 million. The column was left blank this year.

Disney also reported $109 million in restructuring and impairment charges for the current quarter, largely due to content impairments. This is significantly lower than the $2,052 million in charges reported in Q2 FY2024, which primarily related to goodwill impairments tied to Star India and the entertainment linear networks segment.

Income from equity investees dropped from $141 million in Q2 FY2024 to $36 million in Q2 FY2025. The $105 million decline was largely attributed to the losses incurred from the India joint venture during the quarter.