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The Competition Commission of India (CCI) has raised significant concerns about the proposed $8.5 billion merger between Reliance Industries and Walt Disney’s media assets, according to a Reuters report. The CCI’s initial assessment suggests that the merger could adversely affect competition, particularly due to the combined entity’s dominance over cricket broadcast rights.
The merger, which would create India’s largest entertainment conglomerate, has been privately scrutinized by the CCI, which is concerned about the potential market power of the new entity over cricket broadcasting. The CCI’s worries stem from the fact that cricket is a major revenue driver in India, with substantial advertising value.
Sources familiar with the matter have indicated that the CCI has communicated its preliminary view to Reliance and Disney, urging them to justify why a full investigation should not be pursued. “Cricket is the biggest pain point for the CCI,” one source revealed. The CCI has asked the companies to address these concerns within 30 days.
The proposed merger would see Reliance, led by Mukesh Ambani, gain control over a vast portfolio, including broadcast rights for major cricket tournaments such as the Indian Premier League (IPL). This has raised fears about potential price hikes for advertisers and an increased grip on the media market.
Despite attempts by Reliance and Disney to mitigate concerns by proposing to sell fewer than 10 television channels, they have been firm about not relinquishing cricket rights. The companies have argued that these rights, which are set to expire in 2027 and 2028, cannot be sold without the approval of the cricket board, a process that could further delay the merger.
Antitrust experts had predicted rigorous scrutiny for the deal, given its scale and the competitive landscape involving major players like Sony, Zee Entertainment, Netflix, and Amazon. The merger would create a dominant force with around 120 TV channels and two streaming services, capturing an estimated 40% share of the advertising market in TV and streaming segments.
The CCI’s concerns echo those previously expressed in a similar case involving Zee and Sony’s planned $10 billion TV venture, which also faced antitrust scrutiny.
As the CCI continues its review, Reliance and Disney have the opportunity to address the regulator’s concerns through additional concessions. However, the process is likely to be closely watched by industry stakeholders and competitors.
Sources By Agencies
