Morgan Stanley values Star at 11.2 billion USD

With a valuation of 11.2 billion US Dollars by global brokerage firm Morgan Stanley, Star TV has emerged as a significant contributor to its parent, 21st Century Fox, behind only Fox News (16%), Fox International Channels (15.8%) and Regional Sports Networks (14.6%) with a contribution of 11.3% to the fair market value of the group.

The valuation of Star TV, part of the FOX FY16 Year End Fair Market Value report from Morgan Stanley Research,  puts it ahead of all the other listed M&E entities in India. Compared to Star TV, TV 18 Broadcast was valued at USD824 million, while Zee Entertainment was valued on the Indian stock markets at USD5.6 billion on Friday.

This valuation is on the basis of rising ad revenue from India. Star TV's earnings from only its entertainment business were Rs 1,920 crore in June, while for the year ended March 2015, Zee, against a revenue of Rs 3,426, had pegged a profit of Rs 831 crore.

It may be recalled that senior officials of the 21st Century Fox had forecast to analysts EBITDA of over USD 1 billion for Star TV before end-2020. Senior leadership at 21st Century Fox believes the India subsidiary is on course to EBITDA of half a billion US dollars by around 2018.

James Murdoch, CEO of 21st Century Fox, was quoted in a media report as saying, “I think we're still very much on track to see $0.5 billion or so of Ebitda in India within the next three years or so, and a real velocity towards $1 billion of Ebitda shortly thereafter, around the end of the decade or the beginning of the next.”

Star India’s recent investments in sports, aimed to help make India a multiple-sports nation, is being viewed as the most significant organic investment in sports by any network in the region. This, along with its acquisition of Telugu giant MAA’s  TV  business, are being viewed as significant initiatives that will spur greater profitability and growth in the parent’s business interests in TV Network, Broadcasting & Filmed Entertainment in the Asian region.

STAR India recently also launched hotstar, its digital platform for mobile and web, which, today, offers over 35000 hours of curated, handpicked content across Movies, Drama, Sports, Events and more, and became the fastest adopted and growing digital content platform with close to 25 million downloads. For hotstar, the company also acquired the digital rights for the Indian Premier League till 2017 inclusive. It also picked up the media rights for  India’s domestic and international matches to be played in India till 2018, from BCCI.