Reliance and Disney Seek Approval for India Media Merger

Reliance Industries and Walt Disney are navigating regulatory hurdles in their proposed $8.5 billion merger of media assets in India, which would create the country's largest entertainment entity. To expedite antitrust approval, the companies have offered to divest a limited number of TV channels, specifically fewer than ten, while resisting changes to their cricket broadcast rights. This merger, announced in February, has drawn scrutiny from antitrust experts due to its potential to significantly alter the competitive landscape, positioning Reliance-Disney against major players like Sony, Zee Entertainment, Netflix, and Amazon. The Competition Commission of India (CCI) has raised approximately 100 questions regarding the merger, prompting Reliance and Disney to propose selling some regional language channels where they hold a dominant market share. This move mirrors previous concessions made by Zee and Sony during their own merger discussions, which involved selling three channels to alleviate competitive concerns. Historical data indicates that Reliance and Disney previously commanded a substantial market share in local language channels, particularly in Marathi. A significant point of contention remains the cricket broadcasting rights, as the merged entity would control rights for premier leagues, including the Indian Premier League (IPL). Analysts estimate that the combined company could capture 40% of the advertising market in both TV and streaming. However, the companies argue that the cricket rights, expiring in 2027 and 2028, cannot be sold or sub-licensed without prior approval from the Indian cricket board, complicating the approval process further. As the CCI continues its review, the future of the merger hinges on how effectively Reliance and Disney can address concerns about market dominance, particularly in the lucrative cricket broadcasting sector.