The Competition Commission of India (CCI), India’s antitrust body, has issued an initial finding that the proposed $8.5 billion merger of Reliance and Walt Disney’s media assets in India could harm competition due to their control over cricket broadcasting rights. The Competition Commission of India (CCI) privately informed Disney and Reliance of its concerns and asked the companies to explain why an investigation should not be launched, which was the biggest blow to their planned merger.
Antitrust lawyers had warned that the merger, which was made public in February, might be subject to a thorough investigation by the CCI, especially concerning the distribution of sporting rights. The combined company would have two streaming platforms and 120 TV channels, making it a competitor to Sony, Zee Entertainment, Netflix, and Amazon. Billionaire Mukesh Ambani’s Reliance would be the primary owner of the combined company, which would have billion-dollar broadcasting rights for cricket matches on television and streaming platforms. This is raising concerns regarding the company’s possible ability to set prices and control advertising.
About 100 questions about the merger were previously privately posed to Disney and Reliance by the CCI. In response to the CCI’s previous questions about the merger, Reliance, and Disney have stated that they are willing to sell off a few television channels in order to allay concerns about market dominance and hasten the approval procedure. It has been reported that in an attempt to allay CCI’s concerns, the companies have offered to sell fewer than 10 channels.
The companies now have thirty days to reply and make their positions clear, according to the CCI. The notice from the CCI may cause delays in the acquisition’s approval process. The present worries center on the possible price difficulties that advertisers might encounter in the event of a merger. By making additional concessions, the companies can still allay the CCI’s worries. Furthermore, the notice for the time being foreshadows things becoming more complicated. According to the notice, the CCI initially believed that the merger would hurt competition and that the concessions made would not be sufficient.
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The businesses haven’t wavered in their position on cricket rights, though. They have notified the CCI that it is currently not possible to sell the cricket broadcast and streaming rights because they are scheduled to expire in 2027 and 2028, respectively. Moreover, they have highlighted that the cricket board’s approval would be required for any such sale, which could potentially cause the entire process to be delayed. Reliance-Disney is going to purchase digital and television broadcasting rights for major cricket leagues, including the Indian Premier League, which is the richest cricket competition in the world.
Zee and Sony intended to establish a $10 billion television empire in India by 2022. But the CCI issued them a similar warning notice. The companies made concessions, including the divestment of three TV channels, in response to the concerns expressed. Despite the fact that these actions assisted them in getting CCI approval, the merger did not go through.
Reliance Industries Limited (RIL) is allegedly thinking about making a significant adjustment to its streaming offerings in the interim. Following the anticipated merger with Disney+ Hotstar from Star India, RIL may concentrate on JioCinema as its sole streaming platform. Disney+ Hotstar may currently have a much larger user base, but RIL apparently intends to merge its content with JioCinema to form a more powerful platform.
Disney+ Hotstar has received over 500 million downloads from the Google Play Store and is owned by Walt Disney’s Star India. However, Viacom18, which is owned by RIL, has more than 100 million downloads for JioCinema. RIL thinks that maintaining two distinct platforms would be more costly and inefficient despite the differences. Through their merger, RIL would be able to create a more potent streaming service capable of taking on major players like Netflix, YouTube, and Amazon Prime Video. This action follows agreements earlier this year between RIL and Walt Disney to combine Star India and Viacom18, forming a media behemoth with a valuation of roughly $8.5 billion. With more than 100 TV channels and two streaming services, this new business would
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The Competition Commission of India (CCI) and the National Company Law Tribunal (NCLT) are among the regulatory bodies that have not yet approved the merger. RIL is also prepared to close some TV channels in Hindi and other regional markets in order to allay worries about growing too strong in the market.
According to RIL’s 2023 annual report, JioCinema had 225 million monthly users on average. In the final quarter of 2023, Disney+ Hotstar boasted 333 million active users. Disney+ Hotstar had 35.5 million paid subscribers as of June, down from 61 million at its peak. However, the platform has lost some of these users. Losing rights to well-known media, such as HBO shows and the Indian Premier League (IPL), contributed to this decline.
With over 125,000 hours of entertainment, sports, and Hollywood content, JioCinema has the potential to surpass all other streaming services in India if Disney+ Hotstar content is integrated into it. Important sports rights like the Indian Premier League and content from major studios like Disney, HBO, NBCUniversal, and Paramount Global would also be available on the new platform.
Similar decisions have already been made by RIL in the past, such as the combination of Voot and JioCinema. Following a court-approved agreement that included an INR 15,145 crore investment from RIL and Bodhi Tree Systems into Viacom18, JioCinema was recently transferred to Viacom18.
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