The Competition Commission of India (CCI) has asked Reliance Industries and Walt Disney as to why their proposed $8.5-billion merger of media assets in the country should not be probed over antitrust concerns, people aware of the development said.
This could potentially delay regulatory clearance for the deal that is set to create India’s largest entertainment player, but such notices don’t mean the deal would be automatically derailed, they said.
If anything, they give the parties a chance to address the antitrust regulator’s concerns through adequate explanations, further commitments or actions, a regulatory official told ET.
Queries sent to CCI, Reliance and Walt Disney remained unanswered until the paper went to press.
Reliance Industries had in May sought CCI clearance for the merger of Viacom18 and Star India. The deal would not cause any appreciable adverse effect on competition in India, it had said in a notice filed with the watchdog.
The combined entity, which had operating revenue of Rs 25,000 crore in FY23, will inherit 115 TV channels and two streaming platforms, Disney+ Hotstar and JioCinema. RIL plans to merge Disney+ Hotstar with JioCinema once the merger deal gets the regulatory clearance.
The CCI, an industry source said, is concerned that the merged entity, in which Reliance will have a majority stake, could have power to influence attractive cricket broadcast rights and stoke competition concerns.
The proposed Star-Viacom18 entity will consolidate all the key cricket rights, including the Indian Premier League (IPL), International Cricket Council (ICC), Board of Control for Cricket in India (BCCI), Cricket Australia, and Cricket South Africa.
In the last few years, the two entities have made commitments of $10 billion towards cricket rights.
“There are preliminary questions relating to competition concerns. So, many questions about the potential grip of the merged entity over the relevant market are usually asked,” said one of the people cited earlier.
RIL and Disney have offered to shut certain channels in Hindi and regional markets to allay the concerns of the CCI over the potential adverse impact of the Star-Viacom18 combine on media and entertainment business.
‘Not the first time’
Industry experts say this is not the first time a single media company will be holding media rights to all the key cricket properties. In 2018, when the CCI approved Walt Disney’s acquisition of Star India, the company had media rights to properties like IPL, ICC, BCCI, Pro Kabaddi League, and Indian Super League.
In 2017, DTH operator Dish TV had written to the CCI to prevent Star from bidding for the IPL media rights, contending that IPL media rights would give Star a monopoly in cricket broadcasting.
However, the CCI did not restrain Star from bidding for the IPL media rights, which the media company won for Rs 16,347 crore from 2018-22.
Also, as per the Sports Act 2007, sports broadcasters have to mandatorily share the feeds of sporting events of national importance including cricket tournaments featuring the Indian team with public broadcaster Prasar Bharati. IPL is outside the purview of the Sports Act.
Source: Economic Times