STORY: The proposed merger between the media assets of Walt Disney and Indian-owned Reliance Industries may have just become a wrench.
An initial assessment by India’s antitrust body of the proposed $8.5 billion deal has concluded it could harm competition because of both parties’ power over cricket broadcasting rights.
This is according to four sources who spoke to Reuters on Tuesday.
It is the biggest setback yet to the planned merger between Disney and Reliance, which aims to create India’s largest entertainment player.
The combined company, which would be majority-owned by Asia’s richest man, Mukesh Ambani, would compete with Sony, Zee Entertainment, Netflix and Amazon and offer a total of 120 TV channels and two streaming services.
It would also have lucrative rights, worth billions of dollars, to broadcast cricket on TV and streaming platforms.
That has prompted the Competition Commission of India, or CCI, to privately warn Disney and Reliance that their grip on India’s favorite sport may be too tight, raising fears about pricing and the combined company’s potential influence over advertisers.
Cricket has a fanatical following in India, the world’s most populous country with an estimated 1.4 billion people.
The CCI has asked both the companies to explain within 30 days why they should not order an inquiry.
Reliance, Disney and CCI did not respond to requests for comment.