Analysts believe that an episode similar to the Zee-Sony merger antitrust scrutiny could occur in midst of the Reliance-Disney deal and cricket viewing.
Mukesh Ambani-led Reliance Industries and Walt Disney India’s merger could attract antitrust scrutiny, experts have predicted. The Reliance-Disney merger is set to create India’s biggest TV player with over 120 channels. The valuation of the entity is pegged at $8.5 billion.
Read More: Gold Rate Rises In India: Check 24 Carat Price In Your City On March 2
Lawyers have flagged concerns that the combined entity’s strong portfolio of cricket broadcast rights could impact advertisers.
It has been estimated that the Reliance-Disney merger will have a 35 percent viewership share in Indian television. In the past, both Reliance and Disney have shelled out billions of dollars to win the telecast rights of cricket tournaments.
While the overall TV space will be closely assessed by the Competition Commission of India (CCI), six antitrust lawyers said cricket rights are going to be in the spotlight as the regulators examine market share and the power of the combined entity.
Read More: Oil imports from Russia stable in Feb, little room seen for volume growth
K.K Sharma, a former head of mergers at CCI, said the combined Disney-Reliance combo will raise eyebrows among regulators given the market power they will exert, especially in the cricket segment, requiring “deeper scrutiny.”
Sharma, now a senior partner at Singhania and Co, told Reuters, “With Disney and Reliance together, hardly anything of cricket will be left. The regulator gets concerned even when there is a possibility of dominance. Here, it is not merely dominance but almost absolute control over cricket.”
Analysts and lawyers further argued that the strong grip of Disney and Reliance on the cricket viewing ecosystem can lead to advertisers having less bargaining power, attracting scrutiny from CCI.
Read More: OpenAI to Name New Board Members in March: Report
Could this be a repeat of Zee-Sony merger?
As both Reliance and Disney have a commanding presence in both television and streaming sector. Referring to the CCI action against the Zee-Sony merger, experts said the regulator may ask Viacom18 and Disney Star to divest channels in categories where they have market shares beyond the acceptable threshold levels, reported Economic Times.
Disney and Reliance have competed intensely on cricket broadcast rights. Reliance recently offered free live streaming of Indian Premier League matches whose rights it purchased for $2.9 billion. Later, Disney offered free live streaming of the cricket world cup on mobile devices.
With inputs from Reuters
