Disney, Modis announce parting of ways

MUMBAI: The Walt Disney Company tried to make a break for it nearly two years ago, but in the end had to wait till the contract expired before it could set forth on its own in India. At least that is what the announcement says.

Disney and Modi Enterprises Ltd announced this evening that that they were dissolving their joint venture partnership Walt Disney India Pvt. Ltd. The dissolution follows the recent expiry of the 10-year license agreement the two companies had entered into in India, a statement issued jointly by the two sides says.

The statements that the two parties made papered over the bitter wrangling that had led up to the final parting of ways. "India continues to be a major priority for Disney and we remain fully committed to our customers and clients here. We have had a productive business partnership with Modi Enterprises in India, and we would like to thank them for their support and assistance", Doug Miller, senior vice-president and managing director of Walt Disney Television International (Asia Pacific), was quoted as saying.

"The partnership that we enjoyed with Disney for a decade was immensely rewarding and fruitful," said Lalit Modi, chairman, Modi Enterprises Limited. "While it was a novel and enriching experience for us, we take as much pride in saying that we, as local partners, were able to make significant and lasting contributions towards raising the salience of the Disney brand, and in popularizing Disney characters and television programming, in India."

Disney and the Modis are currently working together to formalise transition plans to ensure a smooth continuity of Disney's business operations in India, the statement says.

It was in October 2001 that Disney moved the Foreign Investment Promotion Board (FIPB) seeking permission to set up a wholly owned subsidiary company for the purposes of launching The Disney Channel in India. Though an initial go-ahead was received from the Department of Industrial Policy and Promotion (DIPP) in January 2002, the Modis protested saying that clearance for the proposal could be given only after MEL gave a no objection certificate (NOC), which it was not inclined to do.

The FIPB, under the DIPP, was finally informed in September 2002 by the ministry of information and broadcasting (I&B), the administrative ministry in this case, that it could not support Disney's proposal to launch The Disney Channel.

MEL had opposed Disney's proposal on the grounds that the businesses of the existing joint venture company and the proposed wholly-owned subsidiary were similar. Disney, however, refuted this. One of the arguments that Disney put forth was that apart from the existing joint venture, its earlier agreement with Modi Entertainment Network, another Modi group company, was for a free to air Disney channel. Now that Disney proposed to bring the kids' channel as a pay-per-view channel, the whole business plan had undergone a change and, hence, the Modis should have no objection to issuing an NOC.

The argument however, failed to find favour with the I&B ministry and there the matter remained till now. The Modis took the position that if Disney wanted to bring its channel bypassing the existing agreement, then it would have to either buy out the stake of the Indian partners or else air non-Disney software on any channel it might bring into the country.

The WD India Pvt. Ltd JV was established in 1993. Managing the sale of Disney software in India was Buena Vista Television India (BVTI), a division of WD India. BVTI was responsible for selling serials, animation series, educational software and films from Disney and Disney-associated studios like Hollywood Pictures, Touchstone and Caravan.

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