India's antitrust body has reached an initial assessment that the $8.5 billion India merger of Reliance and Walt Disney media assets harms competition due to their power over cricket broadcast rights, four sources told Reuters on Tuesday.
In the biggest setback so far to their planned merger, the Competition Commission of India (CCI) has privately told Disney and Reliance its view and asked the companies to explain why an investigation shouldn't be ordered, one of the sources said.
Reliance, Disney and CCI did not immediately respond to requests for comment. All sources declined to be named as the CCI process is confidential.
"Cricket is the biggest pain point for the CCI," said one of the sources.
The merged company, which will be majority owned by Asia's richest man Mukesh Ambani's Reliance, will have lucrative rights worth billions of dollars for the broadcast of cricket, raising fears over pricing power and its grip over advertisers.
Antitrust experts had warned the merger, announced in February, could face intense scrutiny as it will create India's biggest entertainment player which will compete with Sony , Zee Entertainment, Netflix and Amazon with a combined 120 TV channels and two streaming services.
