Sony offsets potential IPL revenue loss with strong FY19 show

Even after losing the Indian Premier League (IPL) – the Rs 1,000 crore annual revenue property – to rival Star India, Sony Pictures Network India (SPN) has managed to offset the potential loss and posted strong revenue and profit for the year ended March 30, 2019.

The company has posted operating revenue of Rs 6223.73 crore for FY19, a mere 2.8 per cent drop when compared to a revenue of Rs 6,400.58 crore in the previous fiscal, when IPL 10’s revenue of around Rs 1,200 crore was accounted for.

The company, in its filing to the ROC, posted its net profit for the fiscal at Rs 346.43 crore, down from Rs 520.67 crore.

“IPL was our biggest property, but whoever believed that SPN was too dependent on one property and had nothing else, is now proven wrong. We have not just managed to turn around Hindi general entertainment business, but digital and sports businesses are also raking in good numbers,” said a source in the company.

An email query sent to SPN did not elicit any response till press time Tuesday.

In the driver seat at SPN is MD and CEO NP Singh, who joined the company in 1999 as CFO and turns 60 on Wednesday. In an earlier interaction with ET, Singh had maintained that the company has many assets and is not dependent on IPL alone.

After taking over as CEO in 2014, Singh has made efforts to venture into multiple businesses. He shown aggression in acquiring Ten Sports from Zee Entertainment Enterprises as well as built digital business, Sony LIV, which now claims of over 100 million downloads and monthly active users. Recently, SPN also launched Marathi and Kids channels.

Industry experts and rivals now feel that SPN has made some right calls across sports and other businesses, which have started to deliver.

The company currently has both of its Hindi general entertainment channels – Sony Entertainment Television (SET), headed by and Sony SAB in top four in the all India market and Top 2 in the urban markets. Its Hindi movie channel Sony MAX is number one among pay channels in the genre, while kids channel Sony Yay has also entered into top 5 as per BARC India.

Incidentally, after losing IPL and the BCCI rights to Star India, SPN went ahead and picked up rights of Australia and England & Wales cricket boards. Now it has telecast rights of seven cricket boards - England, Australia, West Indies, South Africa, Sri Lanka, Pakistan and Zimbabwe. It also has rights of the upcoming Olympic Games; eight premier international football properties: UEFA Champions League, UEFA Europa League, LaLiga, Serie A, UEFA Super Cup, FA Cup, UEFA Nations League and UEFA EURO 2020, as well as WWE and mixed martial arts property UFC. SPN has also partnered with the Pro Volleyball and other sporting leagues.

In digital business, where the company owns and operates Sony LIV, the company claims operational profitability at a time when market leader Hotstar has reported losses of over Rs 500 crore for the fiscal.

Sources also add that the drop in the net profit is on the account of drop in the distribution revenue, which directly has affected the bottomline of the company.

“In the last quarter of the financial year, because of the regulatory changes thanks to the new tariff order, SPN has suffered a drop in the distribution revenues. While advertising has more than offset it in the topline, distribution has directly affected net profit,” the source added.

A subsidiary of Sony Corp, SPN now has 29 TV channels, two motion pictures studios, one digital and TV production studio, as well as digital service.