FILE PHOTO: Indian Premier League- Mumbai Indians v Royal Challengers Bangalore- Wankhede Stadium, Mumbai, India - May 9, 2023. Mumbai Indians' cheerleaders celebrate during the match. REUTERS/Francis MascarenhasNEW DELHI :India's antitrust body has reached an initial assessment that the $8.5 billion India merger of Reliance and Walt Disney media assets harms competition due to their power over cricket broadcast rights, four sources told Reuters on Tuesday.
The CCI has asked the companies to explain within 30 days why an investigation should not be ordered.The merged company, which would be majority owned by Asia's richest man Mukesh Ambani's Reliance, would have lucrative rights worth billions of dollars for the broadcast of cricket on TV and streaming platforms, raising fears over pricing power and its grip over advertisers.
The CCI earlier privately asked Reliance and Disney around 100 questions related to the merger. The companies have told the watchdog they are willing to sell fewer than 10 television channels to assuage concerns about market power and win an early approval, sources told Reuters. The CCI notice may delay the approval process but the companies can still address the concerns by offering more concessions, the first source said.
"The CCI is concerned the entity can increase rates for advertisers during live events," said the person. Media agency GroupM estimates spending on sports industry related sponsorship, endorsement and media totalled to near $2 billion in 2023. Cricket accounted for 87 per cent of those spends.