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 the Competition Commission of India’s (CCI’s) approval for their proposed merger, according to a report by The Economic Times.
To gain approval, the companies are considering closing some secondary Hindi general entertainment channels (GECs) while keeping their primary GECs, Star Plus and Colors, operational within the merged entity. They also plan to discontinue some channels in Kannada, Marathi, and Bangla.
Following the merger, the combined entity would control over 40 per cent of the market share in Hindi, Kannada, Bangla, 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 exceeding 40 per cent in a specific category as dominant. As reported earlier, the Reliance-Disney merger, which was announced in February, could face intense scrutiny as it will create the country’s biggest 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 quoted sources as saying that the two companies were optimistic that the CCI would not require them to close or divest their main Hindi general entertainment channels, Star Plus and Colors, or relinquish specific cricket assets.
Merger to be completed by October
Both RIL and Disney aim to finalise their merger by October, with a deadline of February 2026 to complete the process. The CCI has consulted with other media and entertainment firms to assess how the merger might affect the sector.
It is reported that one broadcaster has recommended to the CCI that Star-Viacom18 should be required to relinquish some cricket assets. This suggestion is based on concerns that the merged entity could dominate the sports sector with its extensive portfolio, including properties like the IPL, ICC, BCCI, Premier League, Pro Kabaddi League, and Indian Super League, the report said. However, Reliance and Disney were earlier reported to have told the CCI their cricket rights had been obtained separately under a bidding process which was competitive.
Asking Star-Viacom18 to part with cricket assets might be impractical, according to a legal expert quoted in the ET report, because these assets belong to sports organisations like the BCCI, rather than broadcasters. The broadcasters merely hold the rights to broadcast live sports and commercially use them for a set period.
Merger agreement
Under the terms of the merger agreement, RIL will hold a controlling 56 per cent interest in the newly formed Star-Viacom18 entity, while Walt Disney will retain a 37 per cent stake. Bodhi Tree Systems, established by James Murdoch and Uday Shankar, will own a 7 per cent share. Shankar could become the vice-chairperson of the new entity’s board, with Nita Ambani, wife of RIL’s Mukesh Ambani, taking on the role of chairperson.
First Published: Aug 17 2024 | 1:55 PM IST
