Walt Disney kicks off Fox merger in India with movie studio division

The coming together of Star and Disney's various units, will see the emergence of a powerful media in the country

The integration of the Indian units of Walt Disney Company and 21st Century Fox has begun after the completion of the $71-billion acquisition of the latter. Walt Disney had announced last month that it had full control of a number of 21st Century Fox entities, including the company’s entire movie studio division, its 30 per cent stake in streaming service Hulu, and the Fox Television group, including Star India. 

The coming together of Star and Disney's various units, including films, television, and digital, will see the emergence of a powerful media and entertainment conglomerate in the country. So, to ensure the transition is smooth, the two majors are merging one division at a time. 

As part of the first phase, the movie studio business of the two companies will be brought together, persons in the know told Business Standard. Integration of the TV and digital units will happen in the next phase. 

Star India declined comment on specific questions pertaining to the merger process. Disney India, on the other hand, did not reply to a mail sent till the time of going to press. But it is reliably learnt that the Disney team is examining the books of account of Fox Star Studios as part of due-diligence prior to the merger. 

In a recent meeting with Star India Chairman Uday Shankar and Fox Star Studios Chief Executive Officer Vijay Singh, the Disney team, said persons in the know, had sought clarification with respect to the studio's various projects, including the recent Madhuri Dixit-Ajay Devgan-starrer Total Dhamaal. 

Additionally, the meeting also brought to the fore the issue of team size once the merger is executed. Both Disney and Fox Star Studios are looking at overlapping roles and functions closely to ensure the combined team is lean, persons in the know said. While it is unclear at this stage how many people are expected to get pink slips following the merger of the film divisions, at an overall level, Star is likely to let 350 people go across functions. The Fox Star Studios team will also report to the Disney finance team in Los Angeles as part of the merger process. 

Apart from Shankar, who was elevated as Asia Pacific head of Walt Disney recently, Star India Managing Director Sanjay Gupta will be country manager of the combined entity. Gupta will also have direct responsibility for the studio business in India. K Madhavan will lead regional-language media networks at the merged entity, while Amit Malhotra will lead emerging markets at the merged entity. These were confirmed by Star India in a statement late evening. 

Sanjay Jain, who is the chief financial officer (CFO) at Star India, will join Shankar at the Asia Pacific unit as its finance head, while Amita Maheshwari will lead human resources at Walt Disney APAC. 

While Disney is yet to launch a video streaming service of its own in India, the company is expected to get a huge leg-up with Hotstar becoming a part of the merged entity. 

The presence of Hotstar may goad the Disney management, said sources, to introduce its video streaming service Disney Live (or Disney Plus, as it is likely to be called) in the future. 

On the other hand, Star Sports and ESPN, which is owned by The Walt Disney Company and Hearst Communications globally in an 80:20 joint venture, could be looking at a remarriage of sorts in light of the merger, informed sources said. 

The two formed a joint sports network (headquartered in Singapore) under Star Sports-ESPN till 2012, when they went their separate ways. ESPN currently has a branding deal with Sony Pictures Network India and runs Sony ESPN under the deal. Star Sports, meanwhile, has multiple channels including Star Sports First, which is India’s first free-to-air sports channel.  

Combined Might

Much to offer

• After the film divisions, the TV and digital units would be integrated 
• Disney may launch its own streaming service in addition to Hotstar
• The merged entity may strengthen sports broadcasting with Star Sports and ESPN under its fold

 

Management rejig

• Both firms looking at overlapping roles closely to ensure the new team is lean 
• While it is unclear how many are expected to get pink slips, Star is likely to let 350 people go across functions