Reliance Industries (RIL) and Walt Disney are reportedly planning to offer the Competition Commission of India (CCI) a two-year freeze on advertising rate cards to gain approval for the proposed merger of Star India and Viacom18.
Economic Times, citing sources close to the developments, reports that the companies are considering a commitment to maintain current ad rates for all advertisers and agencies over the next two years as part of their proposal to the anti-trust regulator.
Said sources informed ET that both RIL and Disney believe that a price freeze on ad rate cards would effectively address CCI’s concerns about the merger’s impact on competition.
As RIL and Disney aim to finalise the merger by October, they have been exploring various measures to address the regulator’s concerns regarding the potential impact on the Indian media and entertainment (M&E) industry.
Be that as it may, the fact remains that the biggest issue staring the CCI in the face is around cricket rights – the only sport that matters in the Indian context. Post merger, the combined entity will have a virtual monopoly on media rights (both digital and linear TV) to ALL major cricket properties. IPL, BCCI and ICC rights all under one roof will mean a “no contest” for rival networks when it comes to sports.
As earlier reported, in addition to the rate freeze, RIL and Disney are also proposing to shut down some of their weaker channels in Hindi and regional markets. This move is intended to address concerns about the combined entity’s market share potentially exceeding the 40% threshold in several markets.
