Disney and Reliance propose concessions for merger, but won’t sell cricket media rights: Reports

New Delhi: Disney and Reliance have proposed concessions to gain antitrust approval for their $8.5 billion media merger in India but are unwilling to sell cricket broadcast rights, according to news reports.

Earlier this week, it was reported that the Competition Commission of India (CCI) warned the companies about concerns over their potential control of most cricket rights for TV and streaming in India, which could negatively impact advertisers.

In their response, the companies have promised to refrain from unreasonable advertising rate hikes, as mentioned in the reports. 

Reliance and Disney aim to form India's largest entertainment entity, competing with Sony, Netflix, and Amazon with 120 TV channels and two streaming services. 

Cricket is an important source of revenue, and Disney and Reliance have privately submitted to the CCI that they are unwilling to make such sales, as stated in a Reuters report quoting sources.

The companies have informed the CCI that they are prepared to ensure that advertisement prices for cricket matches won’t be raised unreasonably. However, they have not committed to any specific price caps or freezes on ad rate increases for a certain period, mentioned the Reuters report.

The CCI is expected to review the submissions to determine if the new concessions sufficiently address antitrust concerns or if a more extensive investigation is warranted.

​​The proposed merger may face public scrutiny if both parties fail to address the potential anti-competitive concerns flagged by the Competition Commission of India (CCI), said a Newsdrum report quoting sources.

It is rare for CCI to move for public scrutiny of a proposed deal, as generally, companies concerned present plans to the regulator to address the concerns.

Under the competition law, CCI can push the deal for larger public scrutiny in case there are prima facie concerns of anti-competition aspects. In such a case, the parties concerned will be required to provide public details about their proposed transaction for larger consultations.

The regulator also has the power to direct the companies to divest some of their assets to address anti-competition issues.

After the companies filed an application with the CCI for deal approval in May this year, the watchdog sought various clarifications and additional information from the parties.