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Reliance, Disney ( DIS ) creating entertainment powerhouse

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Antitrust watchers predicted intense scrutiny of deal

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India antitrust body queries on sports rights, YouTube

market

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Companies tell watchdog YouTube key player in

market-sources

By Aditya Kalra

NEW DELHI, July 22 (Reuters) - India's antitrust body

has asked Reliance Industries and Walt Disney ( DIS ) around 100

questions linked to their $8.5 billion India media assets

merger, including details on sports rights as it heightens its

scrutiny of the deal, two sources told Reuters.

Antitrust experts had warned that the Reliance and

Disney ( DIS ) deal, which was announced in February, could face

intense scrutiny as it will create India's biggest entertainment

player with 120 TV channels and two streaming services.

The companies will also together own lucrative rights for

cricket, India's most popular sport.

In a confidential submission to the Competition Commission of

India (CCI) in May, the companies said their merger would not

hurt the competition, and argued that cricket rights will expire

in 2027 and 2028 and allow bidding by rivals, and advertisers

can target cricket-watching consumers on many rival platforms

including YouTube, Reuters reported in May.

The CCI has now sought more details via two sets of

questions, including why YouTube - which mostly has free,

user-generated content - should be treated in the same market as

subscription streaming services like Netflix ( NFLX ) and Disney ( DIS )

, two sources familiar with the matter said.

Reliance and Disney ( DIS ) have responded to the CCI questions and

argued YouTube too has its own licensed, paid content as well as

a wide reach, said the sources, who declined to be named as the

information is confidential.

Data from Media Partners Asia last year showed that YouTube

accounted for 88% of the online video market in India, while the

premium video market of 12% is dominated by streaming services

which "curate premium long-form content".

Reliance-Disney ( DIS ) will also own digital and TV cricket

rights worth billions of dollars for top cricket tournaments as

well as for the Wimbledon tennis championship, which has raised

more antitrust concerns.

The CCI has also asked the companies details on which entity

owns which sports rights and for how long, as well as

information on who had bid for them previously.

"The CCI is so far not raising concerns on the rights but is

gathering information," said one of the sources.

The requests for so much information could be because of the

large size of the deal, said the first source. The second

source, however, said the CCI was asking an unusually large

number of questions.

Reliance, which is led by billionaire Mukesh Ambani, and the

CCI did not respond to Reuters requests for comment. Disney ( DIS )

declined to comment. The CCI is still reviewing the merger.

If it closes, the Reliance-Disney deal will reshape India's

$28 billion entertainment market where Zee Entertainment

and Sony ( SONY ) also operate.

Jefferies estimates Disney-Reliance will command 40% of the

advertising market share in the TV and streaming segments.