Reliance-Disney merger: CCI sends 100 questions over the $8.5 billion deal, says report

Reliance-Disney merger: The Competition Commission of India has raised around 100 questions to Reliance Industries and Walt Disney regarding their proposed $8.5 billion merger of media assets in India, focusing on sports rights and market dynamics, news agency Reuters reported, quoting sources.

Announced in February, the merger has drawn predictions of stringent scrutiny from antitrust experts. The combined entity is poised to become India’s largest entertainment conglomerate, boasting 120 TV channels and two streaming services, alongside lucrative cricket broadcasting rights.

In a confidential submission to the Competition Commission of India (CCI) in May, both companies asserted that the merger would not stifle competition. They noted that cricket broadcasting rights would be up for re-bidding in 2027 and 2028, and highlighted the availability of cricket content on rival platforms such as YouTube, Reuters previously reported.

The CCI's extensive questionnaire includes probing why YouTube, predominantly featuring free user-generated content, should be classified in the same market as subscription-based streaming services like Netflix and Disney+. Reliance and Disney have defended their stance, stressing that YouTube also hosts licensed, paid content and enjoys a broad user base, the report said.

Data from Media Partners Asia in the previous year indicated that YouTube accounted for 88 per cent of India’s online video market, while the remaining 12 per cent was dominated by premium streaming services offering curated long-form content.

The merger will see Reliance-Disney owning digital and TV cricket rights valued at billions, covering major tournaments and events like the Wimbledon tennis championship, prompting further antitrust queries. The CCI has requested detailed information on the ownership duration and previous bidders of these sports rights.

“The CCI is currently gathering information without raising immediate concerns,” one source mentioned in the report said, adding that the extensive information requests likely stem from the deal's significant scale. Another source mentioned the unusually high number of questions being asked.

Neither Reliance, led by billionaire Mukesh Ambani, nor the CCI responded to Reuters' requests for comments. Disney declined to comment as well. The CCI’s review of the merger is ongoing.

Should it proceed, the Reliance-Disney merger is set to reshape India’s $28 billion entertainment industry, where Zee Entertainment and Sony are also key players. According to Jefferies, the combined entity is expected to capture 40 per cent of the advertising market share in the TV and streaming segments.

(With Reuters inputs.)