CASE STUDY ANALYSES
UTV and Disney: A Strategic Alliance

Case Overview

This case is about the United Television and Software Company Limited (UTV) leadership team considering an alliance with the Walt Disney Company (Disney) in 2006. This alliance would include the acquisition by Disney of Hungama TV, India’s leading television channel for kids, created in 2004 and owned by Ronnie Screwvala, CEO of UTV (51%) and UTV (49%). Also, as part of this alliance, Disney would purchase an equity stake of 14.9% of expended capital in UTV. The total investment from Disney was estimated to be $44.5 million.
Background and Dynamics of the case

Under Screwvala’s strong leadership, UTV quickly became one of India’s leading integrated media …show more content…

This channel quickly became popular and the number one channel for kids. However, the departure of two key creative directors at UTV in 2005 resulted in a change of strategy at Hungama, which started to acquire a host of new Japanese and French animated series and limit its production of indigenous content. Despite Hungama still holds a strong position in the market, it started losing money, causing dissatisfaction among UTV investors seeking short-term profits.
Disney, a 75-year-old company is already established around the world and is leading the diversified international family M&E enterprise and generates an important portion of its revenue through its international businesses. It is already present in the Indian market with a channel for kids, ranked number two in the market.
Alliance’s objectives

With this alliance, both UTV and Disney stated the following objectives: * UTV needs a substantial cash reserve to make strategic acquisitions and investments to expand its domestic and international businesses in order to meet future projected revenue goals * UTV wants to continue to expand its international presence and get a have an establish partner to help distributing its films and television content * Disney wants to establish a strategic presence in the rapidly growing Indian market, especially in the kids’ segment in India, where it was