Reliance Industries Ltd (RIL) and Walt Disney are planning to announce a two-year freeze on advertising rate cards in a bid to secure the Competition Commission of India’s nod for the proposed Star India and Viacom18 merger.
The development comes after the Competition Commission of India (CCI) raised concerns that the merger affecting competition in India.
Reliance Industries Ltd (RIL) and Walt Disney are planning to announce a two-year freeze on advertising rate cards in a bid to secure the Competition Commission of India’s nod for the proposed Star India and Viacom18 merger.
The proposal that is being discussed will provide a two-year price freeze on rate cards to all advertisers and agencies as per the Economic Times.
It is reported that both sides are confident that the merger will go through and that the two-year prize freeze on advertising rate cards would relieve CCI’s concerns about the merger’s impact on broadcasting competition in India.
The development comes after the Competition Commission of India (CCI) raised concerns that the $ 8.5 billion India merger would affect the broadcasting competition in India because of the entities' dominance in cricket broadcasting rights.
Viacom 18 officially holds the rights for all India home cricket across TV and digital for the next five years.
As per Reuters, the Competition Commission of India (CCI) warned both Disney and Reliance privately about the possible repercussions on the broadcasting competition in the country. The CCI has even asked the companies to explain in 30 days why the investigation should not be ordered.
The deal was made official for the merger in February this year. The joint Venture is estimated to be $8.5 billion on a post-money basis with RIL owning 16.34 per cent, whereas Viacom18 and Disney owning 46.82 per cent and 36.84 per cent respectively.
The merger would see the entity turning into India’s biggest entertainment company and would have a tremendous impact on the overall market dynamics. It will compete with a combined 120 TV channels and TV streaming services like Sony, Zee Entertainment, Netflix and Amazon.
Before the merger of Reliance and Disney, there were also other consolidating mergers in the broadcasting industry. In December 2021, a merger which was agreed between Zee Entertainment and Sony, but was subsequently called off last year.