Walt Disney and Reliance Industries Ltd (RIL) have proposed to shut down some of the Hindi and regional channels of Star India and Viacom18 to secure approval from the Competition Commission of India (CCI) for their proposed merger, according to a report by Economic times.
To get approval, the companies are considering shutting down some secondary Hindi-language general entertainment channels (GECs), while their main GECs, Star Plus and Colors, continue to operate within the merged entity. They are also planning to discontinue some Kannada, Marathi and Bengali channels.
Following the merger, the combined entity would control over 40 per cent of the market share across Hindi, Kannada, Bengali and Marathi channels, effectively dominating the sports broadcasting sector with exclusive rights to major cricket and non-cricket events, the report said.
The CCI considers any entity with a market share of more than 40% in a specific category to be dominant. As reported earlier, the Reliance-Disney merger, which was announced in February, could face intense scrutiny as it will create the country’s largest entertainment player and compete with Sony, Zee Entertainment, Netflix and Amazon with 120 TV channels and two streaming services between them.
The Economic Times report cited sources as saying that the two companies were optimistic that the CCI would not require them to shut down or divest their flagship Hindi-language general entertainment channels, Star Plus and Colors, or give up specific cricket assets.
The merger will be completed in October
Both RIL and Disney are planning to finalise their merger by October, with a deadline of February 2026 to complete the process. The CCI has consulted other media and entertainment companies to assess how the merger could affect the sector.
A broadcaster has reportedly recommended to the ICC that Star-Viacom18 be required to give up some cricket-related assets. This suggestion is based on concerns that the merged entity could dominate the sports sector with its vast portfolio, which includes properties such as the IPL, ICC, BCCI, Premier League, Pro Kabaddi League and Indian Super League, the report said. However, it was earlier reported that Reliance and Disney had communicated to the ICC that their cricket rights had been separately obtained under a bidding process that was competitive.
According to a legal expert quoted in the ET report, asking Star-Viacom18 to divest its cricket assets could prove impractical, because these assets belong to sports organisations like the BCCI, not the broadcasters. The broadcasters merely have the rights to broadcast live sports and use them commercially for a certain period.
Merger Agreement
Under the terms of the merger agreement, RIL will hold a majority stake of 56 per cent in the newly formed Star-Viacom18 entity, while Walt Disney will retain a 37 per cent stake. Bodhi Tree Systems, founded by James Murdoch and Uday Shankar, will hold a 7 per cent stake. Shankar could become the vice chairman of the board of directors of the new entity, and Nita Ambani, wife of RIL’s Mukesh Ambani, will assume the role of chairperson.
First published: August 17, 2024 | 1:55 PM IS
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