Media groups Sony and Zee have agreed to sell three Hindi channels— Big Magic, Zee Action and Zee Classic — to address possible anti-competition concerns arising out of their proposed merger deal.
This is for the first time that channels are being sold as part of a media merger. All these three channels are at present part of the Zee network.
While Big Magic is a Hindi general entertainment channel (GEC), the other two are Hindi film channels.
The sale was voluntarily proposed by the parties which has been accepted by the Competition Commission of India (CCI). The regulator had cleared the deal subject to certain modifications on October 4.
In September 2021, Zee, had announced that it has entered into a non-binding term sheet with SPNI an indirect subsidiary of Sony Pictures Entertainment Inc to bring together their linear networks, digital assets, production operations and programme libraries.
Zee had then said that the combined entity will own over70 TV channels, two video streaming services (ZEE5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India), making it the largest entertainment network in India.
While the parties had submitted the merger proposal to the CCI, the watchdog had raised some concerns.
In its preliminary assessment, the CCI felt that the merged entity with a strong market position is likely to have the ability and incentive to increase the price of advertisers, distribution platform operators (DPOs) and viewers— in the high market shares TV channels categories — and that it would also have the ability and incentive to engage in differential pricing and behaviour with DPOs.
It was also of the view that the combination prima facie is likely to result in appreciable adverse effect on competition.
It, therefore, issued a notice as to why an investigation in respect of the combination should not be conducted.
Responding to this, the companies offered a voluntary remedy proposal which was in the “nature of behavioural commitments’’, the 58-page order released by the CCI on Wednesday showed.
