Not keen on DTH, Disney may Waltz out of Tata Sky

Mumbai: Disney, the world’s largest entertainment company with interests in films, TV networks, theme parks, consumer products and video streaming, is considering the sale of its stake in Indian direct-to-home (DTH) venture Tata Sky. Two people with knowledge of the matter told ET that Disney is looking for an exit from the distribution sector, which is not part of its core business.“Nowhere in the world has Disney any stake in distribution platforms like cable or DTH and it doesn’t make sense for the company to own a minority stake here in India,” said one of the persons.Disney owns a 29.8% stake in Tata Sky following the completion of its acquisition of 21st Century Fox from Rupert Murdoch in 2019. This includes a 20% direct stake and a 9.8% indirect interest through its 49% shareholding in TS Investments. The stake gives Disney two seats on the Tata Sky board. Uday Shankar, the outgoing chairman of Star and Disney India as well as president of Walt Disney APAC, has been on the board of Tata Sky since September 2007. 78760146‘Grey Area’The other board seat has been vacant since April 2019 after Karl Homes, a Fox executive (now COO, Europe, Sky), stepped down after the Disney acquisition. “Disney has made it clear to Tata Sky that they are not interested in nominating a replacement to Karl and now after Uday’s exit, they may not fill this position either,” said the second person.There was no response to queries sent to Disney in the US and Tata Sky.The 9.8% indirect stake is also something of a “gray area,” said the first of the two cited above. Indian government regulations currently allow for 100% foreign direct investment (FDI) in the DTH sector. However, a broadcaster is restricted to a 20% holding. Fox had set up the joint venture with the Tata Group in 2004 with a 20% stake. Subsequently, Fox and the Tata Group formed TS Investments, which acquired a 20% stake in Tata Sky. That gave Fox an additional indirect stake of 9.8%. However, there have been several queries to Tata Sky seeking clarification about this from the information and broadcasting ministry. ET has accessed one such letter.“It is definitely a grey area for a company like Disney, which is very conscious about its image,” said the first person.

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