Zee Entertainment profit plunges 38% on FIFA costs

Zee Entertainment Enterprises reported a 38% decline in quarterly profit on Friday, marking a sharp financial setback for the Indian broadcaster.

Consolidated net income fell to 478 million rupees, or approximately $5 million, for the July through September period. This compares to 765 million rupees in the same quarter last year. The drop reflects heavy spending tied to FIFA World Cup broadcasting and other corporate initiatives.

The company stated that programming and advertising costs increased significantly due to FIFA obligations and expanded content offerings. Total expenses rose 16% over the prior year. Consequently, core profit margins compressed to 3.2% from 7.4% in the previous fiscal year.

Elara Capital analysts noted in a pre-earnings report that elevated advertising and promotion spending would likely continue to pressure core margins. Zee’s total income grew 12.6% during the quarter. Subscription revenue increased by 30%, driven by FIFA content and a strong pipeline of new shows. Advertising revenue, a traditional pillar for broadcasters, remained flat compared to the previous year.

Zee attributed its diversification strategy to investments in streaming platforms, sports broadcasting, and vertical-video micro-dramas. The company noted that its traditional television business faces ongoing pressure as advertisers shift budgets toward digital platforms. Zee indicated that the upcoming festive season should provide a boost to advertising revenue.

The results were announced in Bengaluru. The rupee exchanged at 95.0250 per US dollar during the reporting period.