India’s Antitrust Body Raises Concerns Over $8.5 Billion Reliance-Disney Merger
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India’s Competition Commission (CCI) has raised significant concerns over the proposed $8.5 billion merger between Reliance Industries and Walt Disney Co.’s media assets, signaling that the deal may adversely impact competition in the country’s sports broadcasting market, particularly in relation to cricket, according to sources cited by Reuters on Tuesday.
This development marks the most substantial challenge yet to the planned merger, which aims to create the largest entertainment company in India, capable of competing with industry giants like Sony, Zee Entertainment, Netflix, and Amazon. The merger would bring together a vast portfolio, including 120 television channels and two streaming platforms.
Per Reuters, the CCI has issued a private notice to both Disney and Reliance, expressing concerns over their dominant control of cricket broadcasting rights. Cricket, being the most popular sport in India, is at the center of these concerns. The merged entity, primarily controlled by Reliance’s chairman, Mukesh Ambani, would gain significant influence over cricket broadcasting, potentially leading to higher prices and greater control over advertising revenue.
Related: Reliance and Disney Seek to Smooth Over Antitrust Hurdles for $8.5 Billion India Merger
One source emphasized, “Cricket is the biggest pain point for the CCI,” underscoring the potential for the merged company to wield considerable power over the sport’s broadcasting landscape. This has prompted the CCI to request the companies to justify within 30 days why a detailed investigation into the merger should not be initiated.
While Disney, Reliance, and the CCI have yet to comment on the matter, the sources, who chose to remain anonymous due to the confidentiality of the CCI’s process, noted that antitrust experts had previously cautioned that the merger would face intense scrutiny, especially concerning the control over sporting rights.
As part of its review, the CCI had earlier posed around 100 questions to the companies involved, focusing on the potential impact of the merger. In response, sources told Reuters that Disney and Reliance have expressed a willingness to divest a small number of television channels to alleviate concerns over market dominance and expedite the approval process.
Source: Reuters
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