Cricket holds a revered status in India, often regarded as a religion. Thus, any changes related to the sport can ignite considerable backlash. The Competition Commission of India (CCI) seems acutely aware of this sensitivity as it examines the challenging merger deal between Reliance Industries and Disney for the acquisition of Star India’s operations.
In order to protect cricket fans from the potential pitfalls of market monopoly, the CCI has raised red flags regarding the merger, expressing concerns during the final stages of the approval process. This substantial deal, valued at approximately $8.5 billion (around ₹71,196 crore), still requires various regulatory approvals.
CCI’s Concerns Regarding the Merger
According to reports from the international news agency Reuters, the CCI’s primary worry involves the broadcasting rights for cricket. With Disney’s Star Sports channels, the OTT platform Disney+ Hotstar, and Reliance’s Jio Cinema possessing nearly all cricket match broadcasting rights in the country—including those for International Cricket Council (ICC) events and the Indian Premier League (IPL)—the merger would create a significant concentration of power.
The Risk of Monopoly
The CCI is particularly concerned that the new company formed post-merger would be primarily controlled by Mukesh Ambani, India’s richest individual, through Reliance’s majority stake. This potential monopoly raises fears of price manipulation and competitive unfair practices. Such control could lead to inflated subscription fees for consumers and strengthen Reliance’s grip over advertisers.
Impact on Market Competition
The CCI’s apprehensions extend beyond just pricing. The regulatory body has privately inquired whether a thorough investigation into the merger would be warranted. So far, neither Reliance nor Disney has provided a formal response to these inquiries. Reports indicate that the CCI had previously posed over 100 questions to both companies regarding the merger, which they justified by stating plans to sell fewer than ten channels to expedite approval.
Market Implications for Competitors
Insider sources suggest that the CCI has formally alerted Disney about the potential impacts on market dynamics resulting from this merger, including ramifications for other players such as Sony, Zee Entertainment, Netflix, and Amazon. Upon completion of the merger, the new entity would potentially operate around 120 TV channels and two OTT platforms, in addition to Reliance’s existing stake in Viacom18.
Next Steps and Expectations
The CCI has granted both companies a period of 30 days to address the questionnaire regarding the merger’s implications. Experts speculate that in their efforts to secure approval, the companies may propose additional concessions aimed at alleviating regulatory concerns.
