Competition Commission of India: The $8.5 billion merger of Disney and Reliance, considered the biggest deal in India’s entertainment sector, is facing an obstacle from the Competition Commission of India (CCI). CCI had raised concerns over several issues including cricket broadcast rights. Now information has come to light that Reliance and Disney have agreed to CCI on almost every issue except cricket rights. Now CCI has to decide whether it approves this merger or not.
Ready not to increase advertising rates rapidly
The giant company formed by the merger of Reliance and Disney will directly compete with Sony, Netflix and Amazon. A recent Reuters report claimed that the Competition Commission of India believes that this merger will weaken the competition for cricket rights in India. Now, based on sources, a Business Standard report has claimed that Reliance and Disney are adamant about cricket broadcasting rights. However, they have agreed not to increase the advertising rates rapidly. They have also assured the CCI that the advertising rates will not be kept unreasonable.
Both companies also agreed to shut down 10 channels
Apart from cricket broadcast rights, the media company formed by the merger of Reliance and Disney will also have about 120 channels and 2 streaming platforms. Out of these, the companies are ready to shut down about 10 channels. CCI had asked these companies to sell some of their cricket broadcast rights. Sources have said that both the companies are not ready for this. So far no official statement has come from CCI, Reliance or Disney in this regard. The companies have only said that they will not increase the rates of advertising rapidly during cricket matches. However, they are not ready to impose any price cap at the moment.
Both companies are broadcasting cricket matches for free
Cricket is the most popular sport in India. These companies have spent about $9.5 billion to acquire its broadcast rights. Sources have said that now the responses of the companies will be analyzed by the CCI. Also, the CCI can do more investigation to address its concerns. In recent years, both the companies have broadcast cricket matches for free. They hoped that along with watching the match, people would also buy their subscription. Jeffries had recently said that the company formed by the merger of Disney and Reliance will have about 40 percent share in the advertisements of TV and streaming segment.
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