CCI Warns Disney-Reliance Media Merger Could Harm Competition: Report

The proposed merger, which would see Asia's richest man Mukesh Ambani’s Reliance emerge as the majority owner, is set to hold valuable cricket broadcast rights worth billions of dollars

Antitrust experts had previously cautioned that the merger, announced in February, could face rigorous scrutiny

Source : PTI

The Competition Commission of India (CCI) has conducted an initial assessment and found that the $8.5 billion merger of Reliance and Walt Disney’s media assets could potentially harm competition due to their combined influence over cricket broadcast rights, according to a report by Reuters citing sources.

In what represents a significant setback for the proposed merger, the CCI has privately communicated its concerns to Disney and Reliance. The Commission has requested that the companies provide arguments as to why a formal investigation should not be initiated, as per the report. 

"Cricket is the biggest pain point for the CCI," said one of the sources in the report.

The proposed merger, which would see Asia's richest man Mukesh Ambani’s Reliance emerge as the majority owner, is set to hold valuable cricket broadcast rights worth billions of dollars. This has raised concerns about potential issues related to pricing power and the company's influence over advertisers.

Antitrust experts had previously cautioned that the merger, announced in February, could face rigorous scrutiny. The deal would create India’s largest entertainment entity, poised to compete with Sony, Zee Entertainment, Netflix, and Amazon, with a combined portfolio of 120 TV channels and two streaming services.

The CCI had previously asked Reliance and Disney approximately 100 questions regarding the merger. To address concerns about market power and expedite approval, the companies have proposed selling fewer than ten television channels, according to sources in the report released on Tuesday.

However, the companies have declined to make concessions regarding cricket rights. They informed the CCI that the broadcast and streaming rights are set to expire in 2027 and 2028 and cannot be sold at this time. They also noted that any attempt to divest these rights would require approval from the cricket board, potentially causing delays in the process.