Reliance, Disney Offer to Sell Channels to Clear Merger Antitrust Hurdles

Reliance and Walt Disney have proposed to sell a small number of channels to ensure antitrust nod for their $8.5 billion India media assets merger, says two sources of Reuters—the two sources said, however, that the two firms are sticking to their guns on changes involving the cricket broadcasting rights that they hold.

With a combined might of 120 channels and two streaming services, their merger will create India’s biggest entertainment player and compete with Sony, Zee Entertainment, Netflix, and Amazon Prime Video in this market.

Following the request of CCI to seek 100 questions in private related to the merger from Reliance and Disney, the companies have revealed that they are considering selling not more than 10 TV channels to remove doubts about market power in an effort to accelerate the approval process.

“Among other things, when the promise to the National Company Law Appellate Tribunal was being read out, it was seen that some of the concessions were relating to the regional Indian language channels, in which the two would have a dominant share,” one of the sources said.

Cricket is another area of dispute in the process of telecom merger. The Disney-Reliance entity will have a 40% share of ads in television and streaming segments.

The two own rights to most of the cricket tournaments including the Indian Premier League (IPL). K.K Sharma, a former head of mergers at CCI, said to Reuters earlier, “With Disney and Reliance together, hardly anything of cricket will be left. Here, it is not merely dominance but almost an absolute control over cricket.”

The CCI has been examining the market power of the companies in cricket rights and has so far found nothing objectionable, but the companies have been able to argue with the CCI that their respective rights will expire in 2027 and 2028 and cannot be sold now, according to sources.

They have further expressed apprehension that in case of any sub-licensing of cricket rights to any third party, prior approvals from the BCCI may further delay the approval process, the sources added.

“One of the arguments being made by the companies is that nothing can be done on cricket rights,” one of the sources said.