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30-08-2024
Bureau Report + Agencies
NEW DELHI: A $8.5bn (£6.43bn) merger between Disney and Reliance Industries has been provisionally approved by the India’s competition watchdog.
The venture, in which billionaire Mukesh Ambani’s Reliance Industries will have majority stake, will create India’s biggest entertainment player which will compete with Sony, Netflix and Amazon.
The joint venture will enjoy broadcasting rights for a majority of India’s sports events, including coveted cricket tournaments.
The merger is expected to be completed in the next six months and will be chaired by Ambani’s wife, Nita Ambani, according to reports.
The deal is “subject to the compliance of voluntary modifications”, India’s competition watchdog said in a press release on Wednesday.
It had previously raised concerns about the control this merger would grant the two companies over broadcasting rights for cricket, the country’s most popular sport with a massive fan base.
Streaming services offered by Disney and Reliance have been attracting Indian subscribers for years by providing free livestreams of cricket matches.
According to media, the two companies have spent $9.5bn on TV and streaming rights for the Indian Premier League (IPL), T20 World Cups and matches held by the International Cricket Council. The competition watchdog had raised concerns that the new entity could increase advertising prices for these matches.
However, the two companies have reportedly pledged not to raise advertising rates excessively for cricket match streams. They have also said they would sell seven to eight of their non-sports TV channels to balance out revenues, a source told media.
With the merger, the two companies will also have Indian broadcast rights for the Wimbledon, MotoGP and the English Premier League or EPL.
The deal “creates a huge digital entertainment giant”, Gurmeet Chadha, managing partner of financial consultant Complete Circle, told CNBC-TV18 news channel.
“They have the content muscle and their tech capabilities are well-known. They have the reach in terms of distribution. They have the relative analytics and insight into what content is consumed where,” he said.
In a country with 1.4bn people and 90% internet penetration, “this has huge, huge long-term implications,” he added.
Here’s a breakdown of their assets, including critical sports rights:
Viacom18, majority owned by Reliance, has 40 television channels, including Comedy Central, Nickelodeon and MTV.
Disney Star, a household name in India, has about 80 channels and the brand is known for Hindi family dramas as well as Hollywood movies.
Viacom18 has the TV rights for domestic and international cricket matches run by the Board of Control for Cricket in India. Disney has TV rights for the popular Indian Premier League (IPL) until 2027.
Both companies’ channels span general entertainment, sports, children’s TV, documentaries and lifestyle programs. They also cover several regional language programming.
Disney has the digital rights for International Cricket Council’s matches in India until 2027, while Ambani’s JioCinema now has the streaming rights for IPL until 2027 after outbidding Disney.
Reliance’s JioCinema and Disney’s Hotstar would have a combined library of 200,000 plus hours of content that includes television dramas, movies and sport events.
