Disney and Reliance have made concessions to secure approval for their $8.5 billion media merger in India, but they are not willing to sell any cricket broadcast rights, which are the biggest prize in the deal. The Competition Commission of India (CCI) had expressed concerns about the merged entity having a tight grip on cricket rights for TV and streaming, potentially hurting advertisers. In response, the companies have offered to limit advertising rate hikes and not increase them unreasonably.
The merger aims to create India’s largest entertainment player, competing with Sony, Netflix, and Amazon with 120 TV channels and two streaming services. However, cricket, with its massive following in the country, is seen as the crown jewel. Despite suggestions from antitrust experts that selling some cricket rights could help clear regulatory hurdles, Disney and Reliance have submitted that they are not willing to do so, according to sources close to the matter. The details of their submissions are being reported for the first time.
The CCI had sent a warning notice to the companies, flagging concerns about the concentration of cricket rights in the merged entity. The companies’ response includes promises to handle advertising rates more carefully but does not involve selling any cricket rights. This move has sparked reactions from experts in the industry, who had speculated that selling off some cricket rights could be a potential solution to address antitrust concerns. However, Disney and Reliance have made it clear in their private submission to the CCI that they are not open to this option.
The merger of Disney and Reliance would create a major player in the Indian entertainment industry, with a vast array of TV channels and streaming services. While this move is seen as a significant step in the competitive landscape of the sector, the issue of cricket rights remains a sticking point. Cricket has a massive fan base in India, and owning those rights is a key asset for any media company looking to establish a strong presence in the country.
The refusal of Disney and Reliance to sell any cricket rights as part of their merger deal has raised questions about the potential impact on competition in the market. The CCI will now have to weigh the concessions made by the companies against the concerns raised about the concentration of cricket rights. The outcome of this review process will be closely watched by industry players and experts, as it could have a significant impact on the future of the media and entertainment landscape in India.
Despite the complexities and challenges surrounding the merger deal, Disney and Reliance remain committed to creating a dominant entertainment player in India. Their combined resources and capabilities are expected to shake up the industry and offer consumers a wide range of content and services. However, the unresolved issue of cricket rights highlights the importance of regulatory oversight in ensuring fair competition and market dynamics. As the CCI continues its review of the merger, all eyes will be on how the outcome will shape the future of the media and entertainment sector in India.
