Kevin Vaz, Kiran Mani and Sanjog Gupta to head Reliance-Disney JV as CEOs

Mukesh Ambani’s Reliance Industries Ltd (RIL) and The Walt Disney Co. announced on Thursday that they have completed the merger of their media arms.

The new joint venture (JV) will be spearheaded by three chief executives: Kevin Vaz will head the entertainment organization across platforms; Kiran Mani will take charge of the combined digital organization; and Sanjog Gupta will lead the combined sports organization.

The JV, or the merger of Viacom18 Media Pvt. Ltd’s media and JioCinema businesses into Star India Pvt. Ltd, has become effective, with RIL having invested ₹11,500 crore in the JV for its growth, the two companies said in a statement. 

The JV has allotted shares to Viacom18 and RIL as consideration for the assets and cash, respectively. 

The transaction values the new entity at ₹70,352 crore on a post-money basis, excluding synergies. At the closing of the transactions, the Reliance-controlled JV was owned by RIL at 16.34%, Viacom18 at 46.82%, and Disney at 36.84%. 

Nita M. Ambani shall serve as the JV’s chairperson, with Uday Shankar as vice chairperson, providing strategic guidance. 

In a separate transaction, RIL bought out Paramount Global’s 13.01% stake in Viacom18 for ₹ 4,286 crore. As a result, Viacom18 is owned 70.49% by RIL, 13.54% by Network18 Media & Investments Ltd, and 15.97% by Bodhi Tree Systems, on a fully diluted basis.

The statement added the joint entity that would result in the combination of networks such as Star and Colors on the television front and JioCinema and Hotstar on the digital front will make for one of the largest media and entertainment companies in the country, with pro forma combined revenue of approximately ₹26,000 crore for the year ended March 2024. 

The JV operates over 100 TV channels and annually produces over 30,000 hours of TV entertainment content. The JioCinema and Hotstar digital platforms have an aggregate subscription base of over 50 million. The JV holds a portfolio of sports rights across cricket, football, and other sports. 

“With the formation of this JV, the Indian media and entertainment industry is entering a transformational era. Our deep creative expertise and relationship with Disney, along with our unmatched understanding of the Indian consumer, will ensure unparalleled content choices at affordable prices for Indian viewers,” Mukesh Ambani, chairman and managing director of RIL, said in the statement.

The CCI approved the transaction on 27 August, subject to compliance with certain voluntary modifications offered by the parties. The companies said that in addition to the CCI, anti-trust authorities in the European Union, China, Turkey, South Korea, and Ukraine have approved the transaction. 

“This is an exciting moment for our two companies, as well as for India’s consumers, as we create one of the top entertainment entities in the country through this JV,” Robert A. Iger, chief executive of The Walt Disney Co., said in the statement.

The merger of Viacom18 and Star India offers a unique opportunity to reorient the industry to better serve diverse cohorts of consumers across the country, Uday Shankar, co-founder of Bodhi Tree Systems, said. “By joining forces with RIL, we are able to expand our presence in this important media market and deliver viewers an even more robust portfolio of entertainment, sports content, and digital services,” Shankar added.

To be sure, according to experts, the combined might of RIL and Disney could set competition up at a disadvantage as far as bargaining power for TV ad rates goes, given that the new entity would have the biggest pie of the market at 40-45%. The deal will give RIL access to Disney’s massive libraries across the English language, including its Marvel catalogue. 

Reliance already has content from HBO and is bullish on regional languages, including the four South Indian languages, as well as Marathi and Bengali. 

Besides, sports will continue to be a priority for the entity, leaving little for others to do on that front.

Star India reported a standalone net loss of ₹12,548 crore for the year ended 31 March 2024.