Disney, Sony, ViacomCBS View Indian Cricket as Streaming Prize

Walt Disney Co. , Sony Pictures Networks India and Viacom18—a joint venture between ViacomCBS Inc. VIAC 1.56% and Reliance Industries Ltd. 500325 1.20% —are among companies planning to bid for the rights, said people involved in the bidding process. The monthlong auction is expected to conclude by late March, the people said.

Cricket broadcasts are a major lure for India’s sizable population of potential streaming subscribers. The auction comes as entertainment streaming companies are under pressure to add customers beyond the U.S. as growth has slowed domestically.

Disney, DIS -0.02% which currently holds the broadcast and streaming rights, faces a potentially steep rise in the cost to retain them. The company has said the cricket matches are an important driver of international subscriptions for its Disney+ streaming service.

For the coming auction, suitors are preparing bids of around 400 billion rupees, or more than $5 billion, according to people familiar with the bidding process.

Indian authorities award cricket broadcasting rights every five years. In 2017, broadcaster Star India, then majority-owned by 21st Century Fox, beat out competitors including Facebook Inc. and Sony Pictures Networks with a $2.5 billion bid that included both digital streaming and television broadcast rights.

In 2019, Disney acquired Star India, including dozens of sports and entertainment-focused TV channels and its streaming service Hotstar—which has since been rebranded Disney+ Hotstar—as part of its $71 billion deal for some of 21st Century Fox’s assets.

Disney plans to bid to retain control of the rights, according to people familiar with the company’s plans. Other likely competitors include Sony Pictures Networks India, a subsidiary of Sony Pictures Entertainment Inc., according to a person familiar with the matter.

A spokeswoman for Sony Pictures Networks India said the company is evaluating bidding for broadcast and digital rights. In December, Sony Pictures Networks India said it was merging its assets with Zee Entertainment Enterprises Ltd.

Another likely bidder is Viacom18, a joint venture between ViacomCBS and Indian conglomerate Reliance Industries, said people familiar with the matter. Viacom18 is in talks to sell a stake to a partnership of Indian media executive Uday Shankar and Lupa Systems, a media investment firm founded by James Murdoch, former 21st Century Fox chief executive and son of Fox Corp. Chairman Rupert Murdoch, according to people familiar with the matter. The elder Mr. Murdoch is also executive chairman of News Corp, which owns The Wall Street Journal.

Representatives for Viacom18 and for James Murdoch had no immediate comment. A potential deal between Viacom18 and Lupa Systems was previously reported by India’s Economic Times.

Mr. Shankar is the former chairman and chief executive of Star India and until 2020 served as Disney’s Asia Pacific head. If the partnership with Lupa and Viacom18 were to win the cricket rights, it would mark a return for Mr. Shankar to an asset that he originally won for his former employer in 2017.

Disney has said it hopes to hit 260 million Disney+ subscribers across the globe by the end of fiscal 2024, or more than double its current total number of subscribers. It ended September with 118.1 million subscribers.

Sports rights have become a hot commodity in recent years among companies that operate video-streaming services. Amazon.com Inc. struck a deal last year to include National Football League games on its Prime Video service, a pact that brought additional games to a tech company without a traditional TV network. Live games are a major selling point for NBCUniversal’s Peacock service and ViacomCBS’s Paramount+ service. The NFL is also exploring options for its Sunday Ticket package of games, which are currently available on DirecTV.

The rising price for the rights to broadcast cricket might be a deterrent for Disney, however, as each Hotstar subscription generates about $1 in revenue a month, compared with between $5 to $6 in monthly revenue generated by each U.S. Disney+ subscription, said Doug Creutz, a media analyst with Cowen & Co.

“Cricket is a huge draw for subscriptions in India, which are a pretty significant minority of the Disney+ subscription base, but five billion dollars is a lot of money,” Mr. Creutz said. “That would pay for a lot of episodes of ‘The Mandalorian.’ That’s money that could be spent elsewhere in an attempt to attract non-Hotstar subscriptions that are more profitable.”

Video-streaming leader Netflix Inc. NFLX 0.36% and Amazon’s Prime streaming service have also looked to India for subscriber growth. In December, Netflix slashed the cost of its basic plan in India by 60% to 199 rupees, equivalent to $2.66 a month. On an earnings call in January, Netflix Co-Chief Executive Reed Hastings acknowledged frustration with the Indian market, adding that the service was “leaning in” there.

Write to Robbie Whelan at [email protected] and Benjamin Mullin at [email protected]