Disney-Reliance merger under scrutiny as cricket viewership is at stake

Photo: Reuters/Francis Mascarenhas

MUMBAI (REUTERS) – The biggest setback so far in Disney and Reliance’s plans to merge their media assets in India in an $8.5 billion deal is that the country’s antitrust watchdog has provisionally assessed that the deal would harm competition because of its power over cricket rights.

The merger aims to create India’s largest entertainment player, which will compete with Sony, Zee Entertainment, Netflix and Amazon, offering a total of 120 TV channels and two streaming services.

The Competition Commission of India has privately warned both companies by sending a notice expressing concerns over their control over the rights to broadcast the world’s most populous sport in the world’s most populous country, one of the sources said.

The CCI has asked the companies to explain within 30 days why an investigation should not be ordered.

“Cricket is CCI’s biggest pain point,” another source said.

The combined company, majority-owned by Asia’s richest man Mukesh Ambani, Reliance would gain lucrative rights worth billions of dollars to broadcast cricket matches on television and streaming platforms, raising concerns about its power over pricing and advertisers.

Antitrust experts had warned that the merger, announced in February, could come under intense scrutiny, particularly over rights to broadcast sports events.

The CCI had earlier privately asked Reliance and Disney about 100 questions related to the merger. The companies had told the regulator they were willing to sell fewer than 10 television channels to ease concerns about market power and get early approval.

However, they have refused to budge on the issue of cricket, telling the CCI that the broadcast and streaming rights will expire in 2027 and 2028 and cannot be sold now, and any such move would require the approval of the cricket board, which could delay the entire process.

Jay Shah, son of Prime Minister Narendra Modi’s Home Minister Amit Shah, holds one of the most senior posts as secretary of the Board of Control for Cricket in India.

Former CCI merger chief KK Sharma said the merger could lead to “almost absolute control over cricket”.

Zee and Sony were planning to create a $10 billion TV giant in India and were given a similar warning in 2022. They offered some concessions by selling three TV channels, which helped them get CCI approval, but the merger ultimately fell through.