Reliance Industries and Walt Disney have sought antitrust approval for their $8.5 billion media merger in India, arguing that their combined power, particularly in broadcasting cricket, would not hurt advertisers, two people with direct knowledge of the matter told Reuters.
Experts had expected the deal, announced in February, to face intense scrutiny as it would create India’s biggest entertainment player with 120 TV channels and two streaming services. It will also own the lucrative rights to cricket, India’s premier sport.
Reliance and Disney told the Competition Commission of India (CCI) that the cricket rights were acquired separately in a competitive bidding process, said the two sources, who declined to be named because the approval process is confidential.
The companies argue that other competitors will not be harmed because they can bid when those rights expire in 2027 and 2028, the sources added.
CCI will now review the confidential submission. Although each approval usually takes a few weeks, it can take longer if the watchdog is not satisfied and asks for more information.
Reliance, Walt Disney and CCI did not immediately respond to requests for comment.
Disney and Reliance currently own the billion-dollar digital and TV cricket rights for the world’s most valuable cricket tournament, the Indian Premier League, International Cricket Council matches and those of the Indian Cricket Board.
This raised concerns that the merged entity could have a major impact on advertisers and consumers, with KK Sharma, the former head of mergers at the CCI, saying in March that the regulator might be worried because “hardly anything will be left of cricket” as Disney-Reliance will have “absolute control over cricket”.
Jefferies estimated that the Disney-Reliance entity would have a 40% share of the advertising market in the television and streaming segments.
The companies told the CCI in their filing that there will be no impact on advertisers as consumers watching cricket can be targeted on many competing platforms where they also consume content, including YouTube and Meta, sources said.
Similarly, the companies said, Indians consume content through TV channels, social media and streaming apps, and advertisers will not be disadvantaged by the deal.
“The lines are blurred (between TV and digital). Companies are targeting demographics. If they don’t like the ad rates on the Disney-Reliance entity, they can always target the consumer” elsewhere, the first source said.
The deal is set to reshape India’s $28 billion media and entertainment market, where the Reliance-Disney combination will compete with Netflix, Amazon Prime, Zee Entertainment and Sony.
© Thomson Reuters 2024
(This story was not edited by NDTV staff and was auto-generated from a syndicated feed.)
