Mergers are not easy. Firstly, JioCinema merged with Voot and now they are sure to take Disney with them. But, whenever such mergers take place, the Competition Commission of India comes into play.
This time it is causing trouble in the said merger between the two giants.
The main worry is that this merger could harm competition because it would give the combined company too much control over the rights to broadcast cricket, whose popularity and influence need not be emphasized.
This issue is the biggest challenge the merger has faced so far. Together, the merged company would control 120 TV channels and two streaming services. And it is indeed a huge deal.
The CCI has sent a private notice to Disney and Reliance, raising its concerns about their monopoly in cricket broadcasting. The regulator is particularly worried that this could lead to higher prices for advertisers who want to air their commercials during cricket matches, which are watched by millions of fans. The companies have been given 30 days to explain why the merger should not be investigated further.
Disney and Reliance have already answered around 100 questions from the CCI about the merger. They have offered to sell fewer than 10 TV channels to ease worries about their market power.
However, they have refused to give up their control over cricket broadcast rights. They argue that these rights, which last until 2027 and 2028, cannot be sold at the moment because that would require approval from the BCCI which could delay the process.
We were already very sure that the merger would face close examination, especially because of the control it would give over sports broadcasting.
But, these are very trivial issues that can easily be dodged. Reliance Industries already has a huge influence over the market and they can use that without any doubt. More importantly, their lawyers are more than qualified to handle these things with ease. Let’s just wait for that.
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