Mega Merger: Disney and Reliance Join Forces

In a move set to reshape India’s media landscape, Walt Disney and Reliance Industries have inked a non-binding agreement to merge their Indian media operations. The proposed deal sees Reliance Industries holding a majority 51% stake, combining shares and cash, while Disney retains the remaining 49%. This strategic alignment signals a power shift in favour of Mukesh Ambani’s Reliance Group.

Reliance’s media and entertainment unit, Viacom18, currently operates numerous TV channels and the JioCinema streaming app. Viacom18 and Disney Star jointly hold rights worth nearly ₹55,000 crore for major cricket properties, including the Indian Premier League (IPL) and ICC events. In 2022, JioCinema bagged the IPL’s digital rights for 2023 to 2027 in a ₹23,758 crore deal. IPL was a property once held by Disney in India. This move has resulted in declining user engagement on Disney’s Hotstar streaming app.

To counter these challenges, Disney has been exploring options for its India business, including a potential sale or joint venture. The proposed merger envisages a unit under Reliance’s Viacom18 assuming control of Star India through a stock swap, accompanied by a planned investment of $1 billion to $1.5 billion in the venture. 

The envisioned board structure is expected to include an equal number of directors from Reliance and Disney, each with at least two representatives. While two independent directors are under consideration, these dynamics might evolve in the coming weeks. 

If Reliance acquires both linear TV and digital businesses from this deal, it could create a near-monopoly, cornering 80-90% of cricket ad revenues and potentially impacting ad rates and content accessibility. The move has significant implications for the lucrative Indian cricket viewing and advertising landscape, estimated at ₹9,000-₹10,000 crore. 

Anticipated to be finalised by February 2024, the merger aims to create one of India’s largest entertainment conglomerates, rivalling key players in television and streaming like Zee Entertainment, Sony, Netflix, and Amazon Prime. 

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