Reliance, Disney seek faster merger approval through channel sales in India

Reliance Industries and Walt Disney have reportedly offered to sell some of their television channels to speed up antitrust approval for a proposed $8.5 billion merger of media assets in India. The merger, announced in February, aims to create the largest entertainment entity in India, intensifying competition with industry giants such as Sony, Zee Entertainment, Netflix and Amazon. However, concerns about the combined entity’s market dominance, particularly in cricket broadcasting, have led to a closer look by the Competition Commission of India (CCI).

The CCI, which has privately asked about 100 questions about the merger, is concerned that the merger could lead to excessive pricing power and increased leverage over advertisers because of the merger’s control over cricket rights. In response, Reliance and Disney have offered to divest fewer than 10 television channels, particularly in regional Indian-language markets where they have a dominant share. Notably, the companies have been reluctant to change their cricket rights, which include the highly lucrative Indian Premier League (IPL).

Cricket is a significant sticking point, given its huge popularity in India and significant advertising revenue. The combined entity is expected to control 40% of the advertising market across TV and streaming platforms. Despite the CCI’s scrutiny, Reliance and Disney have argued that the cricket rights cannot be sold or sub-licensed without prior approval from the Indian Cricket Board, and the rights will expire in 2027 and 2028, further complicating matters.

The outcome of the antitrust review remains uncertain as both companies oppose significant changes to their cricket broadcasting agreements while offering limited concessions to ease concerns about market dominance.

Featured image courtesy of The Globe and Mail

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