India’s Antitrust Body Intensifies Scrutiny of Reliance-Disney $8.5 Billion Media Merger
India’s antitrust authority, the Competition Commission of India (CCI), has intensified its scrutiny of the $8.5 billion merger between Reliance Industries and Walt Disney by posing approximately 100 questions related to the deal, according to two sources familiar with the matter. This heightened examination includes a focus on sports rights, a significant component of the merger.
The merger, announced in February, has drawn attention due to its potential to create India’s largest entertainment entity, encompassing 120 TV channels and two streaming services. Antitrust experts had anticipated rigorous scrutiny of the merger, warning it could significantly alter the competitive landscape.
In a confidential submission to the CCI in May, Reliance and Disney asserted that their merger would not harm competition. They noted that the cricket rights included in the deal will expire in 2027 and 2028, allowing for open bidding by rivals. Additionally, the companies argued that advertisers targeting cricket-watching audiences have multiple platforms at their disposal, including YouTube.
The CCI has requested further details from the companies, questioning why YouTube, which primarily hosts free, user-generated content, should be considered in the same market as subscription streaming services. In their responses, Reliance and Disney contended that YouTube also offers licensed, paid content and boasts extensive reach.
Data from Media Partners Asia revealed that YouTube commanded 88% of India’s online video market last year, while streaming services accounted for the remaining 12%, which is characterized by premium, long-form content.
The merger would also grant Reliance-Disney control over digital and TV rights for major cricket tournaments and the Wimbledon tennis championship, valued at billions of dollars. This has further raised antitrust concerns. The CCI has inquired about the ownership and duration of these sports rights and requested information on past bidders.
“The CCI is so far not raising concerns on the rights but is gathering information,” one of the sources stated.
The extensive information requests may be attributed to the large size of the deal, suggested the first source. However, the second source noted that the CCI was asking an unusually high number of questions.
If finalized, the merger will significantly reshape India’s $28 billion entertainment market. Reliance, led by billionaire Mukesh Ambani, and Disney argue that their combined entity will provide robust competition and diverse content offerings for Indian consumers.
The CCI’s detailed inquiry into the merger underscores the complexity and potential impact of the deal on India’s media and entertainment landscape.
Ben Tang
Financial Desk
