Indian broadcaster Zee’s profit falls as FIFA-related costs weigh

India's Zee Entertainment Enterprises reported a 38% decline in quarterly profit for the July-September period as costs associated with broadcasting the FIFA World Cup and other initiatives offset gains from subscription growth. The broadcaster's consolidated profit fell to 478 million rupees ($5 million), down from 765 million rupees a year earlier.

Higher advertising and promotional spending, driven by the FIFA World Cup, expanded content offerings, and investments in other initiatives, are likely to put pressure on Zee's core profit margins. Elara Capital analysts noted in a pre-earnings note that Zee's programming and advertising expenses grew as a result of these factors.

Overall expenses for the quarter rose by 16%, which pushed down core profit margins to 3.2% from 7.4% last year. Despite a subscription revenue surge of 30%, helped by the FIFA World Cup and a robust content pipeline driving subscriber growth, traditional television business has been under pressure as advertisers shift spending towards digital platforms. Zee has been diversifying by investing in areas such as a streaming platform, sports broadcasting, and vertical-video micro-dramas.

Advertising revenue remained flat, but Zee expects the upcoming festive season to provide a boost. Total income grew by 12.6%.