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Walt Disney has reported a sharp year-over-year decline in its quarterly linear networks performance, with operating income falling $107 million in Q4, a drop largely driven by the merger of Star India transaction (merger with Reliance Industries to make entity - Jiostar).
Star India had contributed $84 million to the segment in the same quarter last year, and its absence this year also pushed international operating income down to $33 million from $52 million, a decline the company directly attributed to the Star India transaction.
The sports segment reflected similar pressure as Star India generated $58 million in revenue and $20 million in operating income in Q4 fiscal 2024, both of which were mentioned as nil this quarter.
The company cautioned that the impact will continue into the next quarter as well, pointing to an unfavorable comparison against the $73 million in Star India operating income recorded in Q1 fiscal 2025—an amount that will not recur in Q1 fiscal 2026.
These financial shifts follow the formation of the Star India joint venture with Reliance Industries on November 14, 2024. Under the JV structure, Reliance holds a 56 percent controlling stake, the company owns 37 percent, and a third-party investor holds 7 percent. With the transaction’s completion, the company stopped consolidating Star India’s revenue and operating income and now only records its 37 percent share of the JV’s earnings. This structural change has created a clear step-down in reported results across entertainment and sports, even as the company continues to retain an economic interest in the Star India business.