Mega-merger: Reliance, Walt Disney to divest 7 channels

Reliance Industries and Walt Disney will divest seven TV channels and ensure that the sale of advertisement slots for cricketing events are not bundled as part of the measures approved by the Competition Commission for the merger of the two groups' media assets, which will create a Rs 70,000 crore media behemoth.

Nearly two months after announcing that the mega deal has been cleared, the Competition Commission of India (CCI) on Tuesday, 22 October, published the detailed 48-page order that lists the various remedial measures in place to address possible anti-competitive concerns post-merger.

The combined entity will have lucrative sports properties like the Indian Premier League (TV and digital), ICC cricket tournaments (TV and digital), Wimbledon, Pro Kabaddi League and BCCI domestic cricket matches.

Earlier, the advertising industry had raised concerns over the merger of Reliance Media assets and Star India, part of Walt Disney, that higher charges could be levied for advertisements during the telecast of major cricket events.

Against this backdrop, both parties have decided that "they will not increase the advertisement rates to an unreasonable level, on their TV and streaming platforms for the ICC events and IPL events for which they hold the broadcasting rights", as per the CCI order.

Besides the merged entity, which will have a feed of all major cricket events like IPL, ICC and BCCI matches, along with the public broadcaster Prasar Bharti, will not bundle together the TV advertisement slot sales.

In response to an earlier show-cause notice issued by the regulator regarding possible anti-competition concerns, Reliance and Walt Disney have voluntarily committed that they "will not bundle together OTT ad slot sales for all three cricketing rights available" with them.

Meanwhile, both OTT platforms, Disney+ Hotstar by Star and JioCinema by Viacom 18 would continue to operate separately.

"Additionally, the parties will not bundle together ad slot sales for IPL on TV and IPL on OTT," CCI said and added that both parties would also ensure implementation of Sports Broadcasting Signals, which allows the public broadcaster to retransmit the sporting events on a free-to-air basis.

Among other remedial measures, the entities will divest seven channels, including Star Jalsha Movies, Star Jalsha' Movies HD, Colors Marathi and Colors Marathi HD. These channels are operated by Viacom18, which is part of Reliance Industries.

Colors Super, operated by Viacom18, in the Kannada General Entertainment Channel as well as Hungama and Super Hungama, operated by Star India in the Kids' Channel Segment, will also be sold.

According to the order, the divestment of the TV channels should include licences for trademarks, channel names and logos for a reasonable period agreed with the approved purchasers.

For five years from the date of divestment of the channels, the parties and/or the joint venture should not acquire any stake or the possibility of exercising any influence over the whole or part of the divested channels, as per the order.

Further, the CCI said the purchase of these channels should not be from Zee Entertainment, Culver Max Entertainment (Sony Pictures) or South-based Sun TV Network.

The regulator will appoint an independent agency to monitor the sale of divestment TV channels.

On 28 August, the CCI said it had approved the merger of media assets of Reliance Industries and The Walt Disney Co to create the country's largest media empire worth over Rs 70,000 crore.

The deal, announced earlier this year, had faced scrutiny by the anti-trust regulator, and the approval has come after the parties proposed certain modifications to the original transaction structure.