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The governing board of the Indian Premier League (Cricket) will likely announce the winning bidder to carry the IPL on June 12.
Disney has held the rights from the 2018 to 2022 season for a reported $2.55 billion.
The rights for 2023-2027 have a reported starting bid of $4.4 billion, with the rights potentially fetching as much as $6.7 billion.
KeyBanc analyst Brandon Nispel estimated Disney+ Hotstar should generate $522 million in revenue in FY22.
Nispel believed the investors viewed the announcement as an adverse event for DIS, regardless of the outcome.
If Disney won the rights, they likely overpaid and would not become profitable in India, Nispel noted. If Disney loses the rights, it will probably miss its Disney+ subscriber targets.
However, Nispel did not feel IPL was the only driver of subscriber growth for Disney. Disney would likely take the programming spend already committed to IPL and reinvest in local language programming, which could offset most IPL-related subscriber erosion.
If Disney won, Nispel saw it likely focus on securing digital rights. This time IPL looked to auction four categories of rights and no all-inclusive package for platforms. It could limit the annual spend commitment, which likely could continue to be a loss-leader for Disney+, though it would possibly provide a funnel and provide the ability to raise prices.
Price Action: DIS shares traded lower by 2.91% at $100.30 on the last check Friday.
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