Regular readers at Binged are well aware that CCI has raised concerns about a proposed $8.5 billion merger between Walt Disney and Reliance. Announced in February, the deal is only getting delayed without any solid update.
This merger will create India’s largest entertainment company, competing with the likes of Sony, Netflix, and Amazon. The merged entity would control 120 TV channels and two streaming services. However, the CCI is worried that it would lead to monopoly over cricket rights. The concerns are right as both Disney and Reliance are staunch players who will be one to eat up its competition.
We need not tell you how significant Cricket is in India, with millions of fans tuning in to watch matches. Disney and Reliance have spent around $9.5 billion in recent years to secure TV and streaming rights for different tournaments. The CCI fears that this monopoly could allow the merged entity to charge advertisers excessively, squeezing out competition and raising costs.
To address these concerns, the CCI has suggested that Disney and Reliance may need to make significant changes to their merger plans.
One option is to sell off some of their cricket broadcast rights or limit their control over certain cricket tournaments or platforms, such as TV or streaming. Another possibility is for the companies to commit to capping advertisement rates for cricket matches for several years.
If this option is implemented then it can severely change the way we watch cricket on either TV or OTT. We are unsure whether they would agree to this but matters are concerning for both entities.
However, the companies have resisted making significant changes to their control over cricket rights, arguing that these rights are essential to the success of the merger. According to industry experts, if companies cannot retain these rights, mergers may not go through.
So, CCI may make the entire merger go in vain. Let’s see how that goes.
Disney and Reliance have already proposed selling fewer than 10 TV channels, primarily in regional languages, to appease the CCI. However, this has not fully satisfied the regulator.
Let’s wait for the upcoming developments.
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