What were the CCI's Concerns Regarding the Disney-Reliance Deal?

Walt Disney Co and Reliance Industries received approval from the Competition Commission of India (CCI) on Wednesday for their $8.5 billion merger of Indian media assets, following a compromise concerning their control over cricket broadcasting rights, India's most popular sport.

MARKET POSITION

* Reliance's media and entertainment unit held a 7.5% market share in the sports TV channel segment for 2023-24, while Disney commanded a 77.7% share during the same period.

* Sony, a competitor, had an 8.6% share in sports TV channels.

* The CCI highlighted in a letter that "the sports TV channel segment is already highly concentrated," noting that most sports content, such as cricket, is broadcast exclusively on either Reliance or Disney platforms.

* The CCI also observed "a potential increase in negotiating power and the ability to monetize sports rights through subscriptions and advertising."

BIDDING PATTERN

* According to the CCI document, "The combined entity would possess greater financial capacity to acquire various sports rights."

* The CCI reviewed previous bids for sports rights and concluded that Disney and Reliance are "close competitors."

* Disney and Reliance informed the CCI that major international players might enter the Indian market to compete for streaming rights of major sports events, but the watchdog noted that no such intentions have been publicly stated by these companies.

AD MARKET DOMINANCE

* Disney and Reliance are vying for advertisers. The CCI noted, "Post-merger, there may be insufficient competition for advertisers."

* The CCI expressed concern that the merger could lead to a lack of competitive pricing, limiting advertisers' ability to negotiate with the combined Disney-Reliance entity.