It is the biggest setback so far to the planned merger, which aims to create India’s biggest entertainment player that will compete with Sony, Zee Entertainment, Netflix and Amazon with a combined 120 TV channels and two streaming services.CCI has privately warned Disney and Reliance through a notice in which it has shared its concerns, one source said. It has asked the companies to explain within 30 days why a probe should not be ordered.
“Cricket is the biggest pain point for CCI,” said another source. The merged company, which would be majority owned by Mukesh Ambani’s Reliance, would have lucrative rights worth billions of dollars for the broadcast of cricket on TV and streaming platforms, raising fears over pricing power and its grip over advertisers.
RIL, Disney offered to cut channels, says report
The merged company, which would be majority owned by Mukesh Ambani’s Reliance, would have lucrative rights worth billions of dollars for the broadcast of cricket on TV and streaming platforms, raising fears over pricing power and its grip over advertisers.
Reliance, Disney and CCI did not respond to requests for comment. All sources declined to be named as the CCI process is confidential. Antitrust experts had warned the merger, announced in Feb, could face intense scrutiny, especially on the sporting rights issue.
CCI earlier privately asked Reliance and Disney around 100 questions related to the merger. The companies have told the watchdog they are willing to sell fewer than 10 television channels to assuage concerns about market power and win an early approval, sources told Reuters. But they had refused to relent on cricket, telling CCI broadcast and streaming rights will expire in 2027 and 2028 and cannot be sold right now, and that any such move would require the cricket board’s approval, which could delay the process.
Reliance-Disney will own digital and TV cricket rights for top leagues, including IPL. The CCI notice may delay the approval process but the companies can still address the concerns by offering more concessions, the first source said. “This is a precursor of things getting complicated… The notice means that initially CCI thinks the merger harms competition and whatever concessions offered are not enough,” added the person.
