Cricket has the status of a religion in India. In such a situation, touching any system related to it is like touching a burning ember. The Competition Commission of India is probably aware of this. Hence, it now sees a lot of problems in the merger deal of Reliance Industries to buy the Star India business from Disney.
To ensure that cricket fans do not have to bear the brunt of monopoly in the market, CCI has raised a lot of concerns over the Reliance-Disney deal at the last moment after almost the entire process has been completed, because this deal is yet to undergo regulatory approvals. This deal between Reliance and Disney is a massive deal worth around $8.5 billion i.e. Rs 71,196 crore.
What is the tension between CCI and the agreement?
International news agency Reuters, citing sources, reported that CCI has expressed the utmost concern regarding the deal between Reliance and Disney over ‘cricket broadcasting rights’, as Disney’s Star Sports channels, OTT platform Disney+ Hotstar and Reliance Jio Cinema hold the rights to almost all types of cricket matches in the country. This includes ICC matches and IPL matches.
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CCI is concerned that after the merger, the majority stake in the newly formed company will go to Reliance of the country’s richest man Mukesh Ambani. Leveraging its monopoly, the company can play with prices and wage price wars in the market. At the same time, it can strengthen its grip on advertisers. The end user may have to bear the brunt of this in the form of increased subscription fees.
Competition in the market will worsen
This is not the only concern of CCI. It has privately asked both Reliance and Disney why an inquiry should not be conducted into this merger. However, there has been no official response from any of the three parties on the matter. However, the report claims that CCI had earlier asked over 100 questions to both Reliance and Disney about this merger, in response to which the companies had said that they were planning to sell less than 10 channels in the merger, so they should get early approval.
I am Sagar Patel, specializing in business news reporting. With a keen focus on economic trends, market analysis, and corporate developments,
