Disney trims India JV loss to $44 million as JioStar posts Rs 3,145 crore profit

Walt Disney’s share of losses from its Indian joint venture with Reliance Industries narrowed marginally in the latest quarter, as the newly combined media business continued to improve its financial performance following the creation of JioStar.

Disney reported a $44 million loss from the Indian joint venture for the quarter ended June 27, compared with a $50 million loss in the same period a year earlier. For the nine months to June 27, the loss stood at $136 million, down from $186 million a year earlier.

The improvement contributed to a rise in Disney’s equity income from investees, as the US entertainment group recognised its share of the Indian venture’s results under the “equity in the income of investees” line in its accounts.

The figures provide an early indication of the financial impact of the combination between Disney’s Indian television and streaming operations and Reliance’s Viacom18. The transaction brought together Star-branded television channels, Disney’s other general entertainment and sports assets and Disney+ Hotstar with Viacom18, creating one of India’s largest media companies.

Disney holds 37% of JioStar, while Reliance Industries owns 56% and Bodhi Tree Systems holds the remaining 7%.

JioStar’s sharp turnaround

The narrowing of Disney’s losses comes as JioStar reported a significant improvement in profitability in its first full financial year following the combination.

For the financial year ended March 2026, JioStar’s revenue from operations rose 46.5% to ₹30,819 crore, compared with ₹21,044 crore in the previous year. More strikingly, the company’s profit after tax increased to ₹3,145 crore, from just ₹18 crore a year earlier.

The turnaround is significant for Reliance and Disney because the Indian business combines several capital-intensive media operations, including television broadcasting, streaming and sports rights.

The company’s improved financial performance also reflects efforts to address the high cost of sports programming, which has become one of the largest financial challenges for Indian broadcasters and streaming platforms.

JioStar reduced its provision for onerous sports contracts to ₹17,742 crore at the end of FY26, from ₹25,760 crore a year earlier. It utilised ₹8,018 crore of the provision during the year and did not create any additional provision.

In its annual filings, JioStar said some sports-event contracts continued to be classified as onerous because expected customer revenue was likely to be insufficient to cover the costs associated with those events.

Such provisions are designed to recognise expected future losses on contracts where the costs of fulfilling the commitments are expected to exceed the economic benefits.

The issue highlights the financial pressure created by the escalating cost of sports rights in India, particularly cricket. JioStar executive vice-chairman Uday Shankar has previously argued that while cricket remains an attractive investment, the cost of acquiring rights has reached levels that make the economics increasingly difficult for broadcasters and platforms.

Disney’s India restructuring

Disney’s latest numbers also need to be viewed against the substantial costs it incurred on its Indian operations before the Reliance combination.

In the nine months ended June 28, 2025, Disney reported $185 million in restructuring and impairment charges, with the bulk related to its Indian investments.

The company recorded a $143 million impairment of goodwill associated with Star India, as well as $109 million in content impairments. It also recorded an impairment of its investment in Tata Play.

Those charges weighed on Disney’s results as the company reassessed the value and prospects of its Indian media assets ahead of the combination with Reliance.

The Reliance-Disney transaction, completed in November 2024, was intended to create a much larger and financially stronger media operation capable of competing across television, streaming, digital entertainment and sports.

For Disney, the transaction also provided a way to retain exposure to the Indian market while sharing ownership of the business with Reliance, which brought Viacom18 and its substantial domestic media footprint into the combined entity.

Tata Play remains under pressure

Disney’s other major Indian media investment, Tata Play, has meanwhile continued to face financial pressure.

Tata Play, a 70:30 joint venture between Tata Sons and Disney, reported a wider net loss of ₹551 crore in FY26, compared with ₹529 crore a year earlier.

Revenue declined 13.5% to ₹3,530 crore, from ₹4,082 crore in the previous financial year.

The contrasting performances of JioStar and Tata Play underscore the divergent fortunes of Disney’s remaining Indian interests. While the Reliance-Disney combination has produced a sharp improvement in JioStar’s reported profitability, the traditional direct-to-home television business operated by Tata Play continues to contend with declining revenue and structural pressure on the pay-TV market.

The Indian media market has increasingly shifted towards streaming and connected television, while consumers have gained access to a growing number of free and subscription-based digital entertainment options. This has put pressure on traditional distribution businesses such as direct-to-home television.

A more important test ahead

JioStar’s FY26 results represent a substantial improvement, but the sustainability of the turnaround will depend heavily on its ability to balance sports-rights costs with advertising, subscription and distribution revenues.

The reduction in the sports-contract provision suggests that some of the losses anticipated when the contracts were initially classified as onerous have now been absorbed. But the remaining ₹17,742 crore provision demonstrates the scale of future financial commitments embedded in JioStar’s sports portfolio.

For Disney, the latest reduction in its share of losses is therefore an important but still relatively modest improvement. The company remains exposed to the performance of JioStar through its 37% stake, meaning that stronger profitability at the Indian joint venture should increasingly flow through to Disney’s reported equity income.

The trajectory also marks a significant change from the period before the Reliance transaction, when Disney was absorbing sizeable impairment and restructuring charges associated with its Indian operations.

The combination has effectively shifted Disney’s Indian strategy from operating a wholly controlled media portfolio to holding a minority stake in a much larger joint venture backed by Reliance’s balance sheet and distribution capabilities.

If JioStar can sustain its improved profitability while reducing the burden of expensive sports contracts, Disney’s Indian investment could become a more meaningful contributor to its overall financial performance rather than a recurring source of losses and impairment charges.