India‘s antitrust watchdog has expressed initial concerns about the proposed $8.5 billion merger between Reliance and Walt Disney‘s media assets in the country, sources told Reuters on Tuesday.
The Competition Commission of India (CCI) has reportedly flagged potential harm to competition, primarily due to the combined entity’s power over cricket broadcast rights. Cricket is the most popular sport in India, the world’s most populous nation.
In 2022,Disney failed to win the streaming rights for the 2023-2027 seasons of the lucrative Indian Premier League cricket tournament, which it had shown on its Disney+ Hotstar streaming service. Paying roughly $3 billion each, Reliance’s Jio took the streaming rights, while Disney secured only the pay-TV rights.Also in 2022, Disney Starhad won Indian TV and digital rightsto both men’s and women’s global events conducted by the InternationalCricketCouncil (ICC) from 2024 through 2027.Now, between them, Reliance and Disney have a near-stranglehold on cricket rights in India.
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The CCI’s stance marks a significant hurdle for the Disney-Reliance deal, which aims to create India’s largest entertainment conglomerate. The merged company would boast 120 TV channels and two streaming services, positioning it to compete with major players like Sony, Zee Entertainment, Netflix and Amazon.
According to Reuters’ sources, the antitrust body has privately communicated its concerns to Disney and Reliance through an official notice. The companies have been given 30 days to explain why a full investigation should not be launched. “Cricket is the biggest pain point for the CCI,” one source told Reuters.
The merged entity, set to be majority-owned by Reliance and its Viacom18 outfit, helmed by Asia’s richest individual Mukesh Ambani, would control lucrative cricket broadcast rights across television and streaming platforms. The Reuters report suggests that the combined entity would have a 40% share of the advertising market in TV and streaming segments. “The CCI is concerned the entity can increase rates for advertisers during live events,” a source told Reuters.
PvNew has reached out to Reliance and Disney India for comment.
The creation of this new Indian behemoth comes in the wake of Sony Group Corporation ending its more than two-year attempt to merge its TV and streaming businesses in India with local giant Zee Entertainment Enterprises Limited, in what would have been a $10 billion deal.
