The Competition Commission of India has approved the merger between Reliance Industries and Walt Disney India’s media assets, with certain voluntary modifications. The CCI approval takes the two players a step closer in creating a $8.5-billion entertainment powerhouse, which will compete with Amazon, Netflix and Sony Pictures Networks.
Reliance and Disney have agreed to divest some television channels from their portfolios as well as committed to advertising price caps for streamed cricket matches for the CCI approval to come into effect.
The regulator had expressed concerns about the merger hurting competition in India’s media and entertainment sector as Reliance Disney will have monopoly over cricket broadcast rights, which could result in them jacking up advertisement rates. Cricket has a fanatical following in India and outside of it, and broadcast rights of cricket tournaments hold a significant commercial value, running into billions of dollars.
Reliance’s Viacom18 has TV rights for domestic and international cricket matches run by BCCI, whereas Disney has TV rights for IPL till 2027. The US company also has digital rights for International Cricket Council’s matches in India till 2027 and Reliance’s Jio Cinema has streaming rights for IPL till 2027.
According to reports, Reliance-Disney will have to sell 7-8 non-sports TV channels - mostly in regional languages - and have offered a commitment not to increase advertisement rates unreasonably for streamed cricket matches. Reliance operates 40 TV channels including MTV, Comedy Central and Nickelodeon in the country, while Disney runs 80 channels.
CCI said that it has approved the proposed combination involving Reliance, Viacom18 Media, Digital18 Media, Star India and Star Television Productions, subject to modifications submitted voluntarily by them. CCI didn’t spell out the details. CCI will release a detailed order in the coming days, which will clear what hindered the merger approval.
