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The $8.5 billion merger between Walt Disney Co. (NYSE:DIS) and India’s Reliance Industries media assets faces significant resistance from the Indian antitrust regulator.
The Competition Commission of India (CCI) has raised concerns that the combined entity could monopolize cricket broadcasting rights, harming advertisers.
The companies are exploring various remedies to keep the deal alive but remain reluctant to part with these prized rights.
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Citing sources, the Reuters report indicates that Disney and Reliance are considering alternatives like capping ad rate increases for cricket matches, aiming to address the regulator’s concerns without giving up control over cricket broadcasts.
However, experts believe that to satisfy the CCI, the companies may need to offer structural changes, such as selling off certain cricket rights or channels, particularly those unrelated to cricket.
Cricket is central to the Disney-Reliance merger, which aims to create India’s largest entertainment powerhouse.
The merged entity is poised to compete with Sony Group Corporation (NYSE:SONY), Netflix Inc. (NASDAQ:NFLX), and Amazon.com Inc. (NASDAQ:AMZN) through a combined portfolio of 120 TV channels and two streaming platforms.
Given the sport’s massive popularity in India, cricket rights are considered the crown jewel of this deal, representing billions of dollars in potential revenue.
Despite mounting regulatory pressure, the companies have privately indicated their unwillingness to sell cricket rights, which they consider essential to the merger’s success.
Disney and Reliance have collectively invested nearly $9.5 billion in securing broadcasting rights for high-profile events, including the Indian Premier League and ICC tournaments.
The Reuters report highlights that the merger could be in jeopardy without these cricket rights.
While Reliance has proposed selling a few regional TV channels, the CCI remains unsatisfied, signaling that a more comprehensive review could be initiated, potentially delaying the merger for months.
As the process unfolds, it’s clear that the fate of cricket rights could ultimately determine whether the merger goes through.
Price Action: DIS stock is down 0.72% at $90.06 at the last check on Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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