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

India’s Zee Entertainment Enterprises reported a 38% drop in quarterly profit on Friday, as costs related to the FIFA World Cup broadcast and other initiatives offset gains from subscription growth.

The broadcaster’s consolidated profit fell to 478 million rupees ($5 million) for the July-September period, from 765 million rupees a year earlier.

Higher advertising and promotion spending would likely pressure Zee’s core profit margins, Elara Capital analysts said in a pre-earnings note.

Zee said its programming and advertising expenses grew on account of FIFA, expanded content offerings and investments in other initiatives.

Overall expenses rose 16%, pushing down core profit margins to 3.2% from 7.4% last year.

Indian broadcaster Zee posts quarterly loss on weak ad demand, higher costs

Subscription revenue rose 30%, helped by FIFA and a strong content pipeline driving subscriber growth.

Zee’s traditional television business has come under pressure over the years as advertisers have been shifting spending towards digital platforms.

Zee has been diversifying, investing in areas such as a streaming platform, sports broadcasting and vertical-video micro-dramas.

Advertising revenue, a mainstay for broadcasters, stayed flat, though Zee said the upcoming festive season should help.

Total income grew 12.6%.