Disney Offers to Sell Off Television Channels to Speed up $8.5 Billion Merger

Disney is prepared to begin shutting down television channels if it means it can avoid a government crackdown on its attempts to create a monopoly, a new report says.

Earlier this year, The Walt Disney Company announced a “strategic joint venture” between itself, Reliance Industries Limited, and Viacom18 Media Private Limited. While Disney may dominate the entertainment industry in North America, Reliance (which owns a 57.48% stake in Viacom18, making this effectively a partnership between two companies, not three) is by far the largest and most powerful company in India. Its interests are vastly more diverse than the Mouse’s, encompassing everything from retail shopping to private security to a firm control over television media in India, the world’s largest consumer market.

Therefore, the joint venture between Disney and Reliance is a pretty huge deal for both companies. India has been a hotly contested market for streaming entertainment and television in recent years, and the Mouse has been struggling to maintain a foothold in it.

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Disney’s press release for the Reliance venture describes it as “one of the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together iconic media assets across entertainment (e.g. Colors, StarPlus, StarGOLD) and sports (e.g. Star Sports and Sports18) including access to highly anticipated events across television and digital platforms through JioCinema and Hotstar. The JV will have over 750 million viewers across India and will also cater to the Indian diaspora across the world.”

However, while a huge entertainment media venture between business behemoths sounds great to the likes of Disney CEO Bob Iger and Reliance Industries chairman Mukesh Ambani, there are antitrust laws in India to avoid non-competitive monopolies. It turns out that the $8.5 billion deal, which will give the two companies mutual control over 120 channels and 2 different streaming apps (approximately 40% of the entire market) to compete with Sony, Amazon, Netflix, and Zee Entertainment, is under some pretty heavy scrutiny, and Disney is reportedly willing to start ditching television channels in order to get it cleared.

Per Reuters, “After the Competition Commission of India (CCI) privately asked Reliance and Disney around 100 questions related to the merger, the companies have told the watchdog they are willing to sell some TV channels – fewer than 10 – to assuage concerns of market power and win an early approval, said the sources, who spoke on condition of anonymity.”

This essentially means that rather than actually answering questions about a titanically huge business deal, Disney is willing to shut down its own television channels and/or sell them off to rivals to get it done quickly. That is rarely a sign of a stable joint venture, which hints that there might be some more friction between the Mouse and Reliance than is being reported.

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It seems that both Disney and Reliance are paranoid about losing any control over television broadcast and streaming rights to cricket in India, a massively popular form of entertainment. According to former CCI head of mergers K.K Sharma, “With Disney and Reliance together, hardly anything of cricket will be left … Here, it is not merely dominance but almost an absolute control over cricket.”

If Disney can drop a few television channels to get a stranglehold on cricket, it is perfectly willing to. We’ll just have to see whether the Indian authorities will let it happen.

Do you think Disney is trying to create a monopoly in India?