NEW DELHI:
India’s Competition Commission (CCI) has raised concerns over the $8.5 billion merger between Reliance and Walt Disney’s media assets, specifically regarding the impact on competition due to their control over cricket broadcasting rights, according to sources familiar with the matter told Reuters.
The development marks a significant challenge for the merger, which aims to establish India’s largest entertainment entity, competing against major players such as Sony, Zee Entertainment, Netflix, and Amazon, with a combined portfolio of 120 TV channels and two streaming services.
The CCI has privately issued a notice to Reliance and Disney, highlighting worries about the dominance the merged entity would have over cricket broadcasting, which is a highly popular sport in India. The notice requires the companies to provide an explanation within 30 days as to why a full investigation should not be launched. Sources indicate that cricket rights are a major point of concern for the CCI, given the potential influence on pricing and advertising power.
The merger, which would see the new entity majority-owned by Mukesh Ambani’s Reliance, includes highly valuable rights to broadcast cricket on both television and streaming platforms. These rights are worth billions of dollars, raising fears about the potential for the merged company to exert significant control over the market.
Neither Reliance, Disney, nor the CCI have responded to requests for comment on the issue, and sources have remained anonymous due to the confidential nature of the CCI’s proceedings. Experts had previously anticipated that the merger, announced in February, would attract significant scrutiny, particularly concerning sports broadcasting rights.
In response to earlier inquiries from the CCI, Reliance and Disney answered around 100 questions related to the merger. To address concerns about market dominance, the companies have offered to divest fewer than 10 television channels in hopes of securing early approval. However, they have been unwilling to negotiate on cricket broadcasting rights, citing the fact that these rights, which expire in 2027 and 2028, cannot be sold without the approval of the Board of Control for Cricket in India (BCCI).
The BCCI, which plays a crucial role in Indian cricket, has Jay Shah, son of Home Minister Amit Shah, serving as its secretary. The CCI’s concerns may delay the approval process for the merger, but the companies still have the opportunity to address these issues by offering additional concessions.