Warner Bros. Discovery to spend more than $1 billion downsizing operations in India
The Warner Bros. Entertainment unit is set to spend more than $1 billion to streamline operations in India, including the sale of its movie studio Bollywood, which in a few months will be divested by the Japanese entertainment group Sanyo.
The planned move by the Warner Bros.-owned unit to divest itself of its film studio, home to such iconic movies as the Indiana Jones franchise and Harry Potter, is part of an effort to reduce the company’s debt, sources familiar with internal discussions told Reuters, in what will be one of the largest restructuring efforts in Hollywood history.
The sale of Bollywood, known as the Hindi market in Hollywood and known in the industry as “the Hindi motherland”, will be followed by the sale of the studio’s foreign theatrical distribution unit.
The unit, which was launched in 2009, has been one of the primary reasons for Warner Bros Entertainment’s growth in India as a top film market on which it has largely based its revenue growth.
The studio and Sanyo will sell their stake in Bollywood for nearly $1.6 billion, which brings the overall cost of the sale down to $1.67 billion, including what would have been the net proceeds of the sale of the unit had the sale happened last year.
The deal also leaves Warner Bros Entertainment with three key assets in the country. Besides Bollywood, the studio has the rights to local language titles and Hindi films across the world. Sanyo will also take part in the Bollywood unit’s film distribution on some international markets.
There have been reports that Warner Bros Entertainment has been unhappy with the way Sanyo decided to finance the Bollywood unit, which has been unable to take advantage of the new Chinese market.
Warner Bros. Entertainment said on Friday that it planned to divest a portion of its Bollywood distribution business in an effort to reduce its debt and improve its cash flow.
The company, which is in the process of selling its film studio Warner Bros., the videogame and animation unit Warner Bros. Animation and the music label Warner Records to New York private equity firm TPG Capital in order to avoid going private, would continue to