By Aditya Kalra and Munsif Vengattil
NEW DELHI (Reuters) – Walt Disney (NYSE:) Co and Reliance Industries received approval from the Competitors Fee of India (CCI) on Wednesday for an $8.5 billion merger of their Indian media property after providing concessions referring to their grip on broadcasting rights for cricket, India’s favorite sport.
Listed here are the important thing factors raised within the CCI’s preliminary evaluation, in response to a confidential letter despatched to the businesses on Aug. 19 and reviewed by Reuters:
MARKET POSITION
* Reliance’s media and leisure unit had a market share of seven.5% in 2023-24 within the sports activities TV channel section, whereas Disney had a 77.7% share in these years.
* Rival Sony (NYSE:) had an 8.6% share in sports activities TV channels.
* “The sports activities TV channel section is already extremely concentrated,” the CCI stated within the letter. “A lot of the present sports activities content material reminiscent of cricket … are streamed on both of the 2 platforms (of Reliance and Disney)”.
* The CCI additionally famous “there’s a risk of upper negotiating energy and the flexibility to monetize the sports activities rights by way of subscription and promoting”.
BIDDING PATTERN
* “The mixed entity would have a bigger monetary capability to amass varied sports activities rights,” the CCI doc stated.
* It analysed the bids submitted earlier for sports activities rights and located that Disney and Reliance are “shut rivals”.
* Disney and Reliance informed the CCI that massive international gamers are more likely to enter the Indian market to bid for streaming rights of key sports activities occasions, however the watchdog stated there was no such intent expressed by firms publicly.
AD MARKET DOMINANCE
* Disney and Reliance are competing for advertisers. “After the merger, there will not be an enough variety of rivals … for advertisers,” the CCI stated.
* As there can be an absence of aggressive costs, advertisers could not be capable of negotiate with the Disney-Reliance merged entity, the CCI feared.
