Reliance, Disney offer concessions to win antitrust nod for India media merger, Reuters reports

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Reliance, Disney offer concessions to win antitrust nod for India media merger, Reuters reports

Reliance and Walt Disney have offered to sell some channels to win faster antitrust approval for their $8.5 billion India media assets merger, but are resisting changes to cricket broadcast rights they own, two sources familiar with the matter said.

Antitrust experts have warned that the Reliance-Disney merger, announced in February, could face intense scrutiny as it will create India’s biggest entertainment player which will compete with Sony, Zee Entertainment,

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with a combined 120 TV channels and two streaming services.

The merged company, which will be majority owned by Asia’s richest man Mukesh Ambani’s Reliance, will also have lucrative rights worth billions of dollars for the broadcast of cricket, raising pricing power fears and its grip over advertisers.

After the Competition Commission of India (CCI) privately asked Reliance and Disney around 100 questions related to the merger, the companies have told the watchdog they are willing to sell some TV channels — fewer than 10 — to assuage concerns of market power and win an early approval, said the sources, who spoke on condition of anonymity.

The sources said some of the concessions being offered relate to regional Indian language channels where the two companies may have a dominant market share.

Zee and Sony planned to create a $10 billion TV behemoth in India and in 2022 offered concessions by selling three TV channels. That helped them win CCI approval, but the merger eventually collapsed.

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CCI’s notification approving that deal, which contained details of the competitive landscape, showed that in local language Marathi, Disney and Reliance channels back then had a combined market share of between 65% and 75%. In Bengali language entertainment channels, the two had as much as a 50% market share.

Disney declined to comment. Reliance and the CCI did not respond to Reuters requests for comment.

Cricket rights woes

Cricket is another point of contention in the merger process. The sport has a fanatical following in India and matches are sought after by advertisers.

Reliance-Disney will own digital and TV cricket rights for top cricket leagues, including for the world’s most valuable cricket tournament, the Indian Premier League (IPL).

Jefferies said the Disney-Reliance entity will have a 40% share of the advertising market in TV and streaming segments.

K.K Sharma, a former head of mergers at CCI, has told Reuters previously: “With Disney and Reliance together, hardly anything of cricket will be left … Here, it is not merely dominance but almost an absolute control over cricket.”

The CCI is studying the market power of the companies in cricket rights and has not raised any concerns so far, but the companies have argued with the CCI that the rights will expire in 2027 and 2028 and can’t be sold right now, the sources said.

Further, the companies have raised concerns that any sub-licensing of cricket rights to another party would also require prior approvals from the Indian cricket board, which could prolong the approval process, the sources said.

“The companies are arguing that nothing can be done on cricket rights,” one of the sources said.

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