By Aditya Kalra

NEW DELHI (Reuters) - Reliance Industries and Walt Disney ( DIS ) have sought antitrust clearance for their $8.5 billion India media merger by arguing their combined power, especially on cricket broadcasting, will not hit advertisers, two people with direct knowledge told Reuters.

The deal, announced in February, has been expected by experts to face intense scrutiny as it will create India's biggest entertainment player with 120 TV channels and two streaming services. It will also own lucrative rights for cricket, India's top sport.

Reliance and Disney ( DIS ) have told the Competition Commission of India (CCI) the cricket rights were obtained separately under a bidding process which was competitive, said the two sources, who declined to be named as the approval process is confidential.

The companies argue other competitors won't be harmed as they can bid when those rights expire in 2027 and 2028, the sources added.

The CCI will now review the confidential filing. Though any clearance typically takes several weeks, it can take longer if the watchdog isn't satisfied and seeks more information.

Reliance, Walt Disney ( DIS ) and the CCI did not immediately respond to requests for comment.

Disney ( DIS ) and Reliance currently own digital and TV cricket rights worth billions of dollars for the world's most valuable cricket tournament the Indian Premier League, International Cricket Council matches and those of the Indian cricket board.

That has raised concerns the merged entity could have high leverage over advertisers and consumers, with K.K Sharma, a former head of mergers at CCI, saying in March the regulator could be concerned as "hardly anything of cricket will be left" as Disney-Reliance will have "absolute control over cricket".

Jefferies has estimated the Disney-Reliance entity will command a 40% share of the advertising market in TV and streaming segments.

The companies have told the CCI in their filing there will be no impact on advertisers as cricket-watching consumers can be targeted on many rival platforms where they also consume content, including YouTube and Meta, the sources said.

Similarly, the companies have said, Indians consume content across TV channels, social media and streaming apps, and advertisers will not be disadvantaged by the deal.

"The lines are blurring (between TV and digital). Companies target by demographics. If they don't like ad rates on the Disney-Reliance entity, they can always target a consumer" elsewhere, said the first source.

The deal is set to reshape India's $28 billion media and entertainment market, where the Reliance-Disney combo will compete with Netflix, Amazon Prime, Zee Entertainment and Sony.