CCI Takes Note of RIL-Disney Merger, Poses Questions

The Competition Commission of India (CCI) has appealed to Reliance Industries and Walt Disney to give reasons why their suggested $8.5 billion merger of media assets in India should not be looked for antimonopoly issues, according to sources well known with the matter.

This could certainly detain managerial approval for the deal, which aims to create India’s largest entertainment player. However, such notices do not necessarily mean the deal will be blocked. Instead, they provide the parties a chance to address the antimonopoly regulator’s concerns through detailed clarification, additional commitments, or actions, according to a regulatory official who spoke to ET.

Queries sent to the CCI, Reliance, and Walt Disney went unanswered by the time of publication. In May, Reliance Industries had sought CCI approval for the merger of Viacom18 and Star India Pvt Ltd, asserting in a notice to the regulator that the deal would not significantly harm competition. The merged entity, which had operating revenues of ₹25,000 crore in FY23, would acquire 115 TV channels and two streaming platforms: Disney+ Hotstar and JioCinema.

Once the merger receives regulatory approval, Reliance Industries plans to combine Disney+ Hotstar with JioCinema. An industry source indicated that the CCI is worried the merged entity might gain too much influence over valuable cricket broadcast rights.

This could raise competition concerns, the source explained. The proposed Star-Viacom18 entity, in which Reliance will hold a majority stake, would consolidate all major cricket rights, including those for the Indian Premier League (IPL), the International Cricket Council (ICC), the Board of Control for Cricket in India (BCCI), Cricket Australia, and Cricket South Africa.

In recent years, the two companies have committed $10 billion to cricket rights. “Preliminary questions regarding competition concerns are being raised. Thus, there are numerous inquiries about the potential market dominance of the merged entity,” one source noted.

To address the CCI’s concerns about the potential negative impact of the Star-Viacom18 merger on the media and entertainment industry, Reliance and Disney have proposed shutting down certain channels in Hindi and regional markets. Industry experts point out that this is not the first instance of a single media firm holding rights to all major cricket properties. For example, in 2018, when the CCI approved Walt Disney's acquisition of Star India, the company already held rights to significant properties such as the IPL, ICC, BCCI, Pro Kabaddi League, and Indian Super League.