News Corp gets CCI nod for STAR buying out ESPN in joint venture

The Competition Commission of India (CCI) has approved Rupert Murdoch-owned News Corp’s acquisition of ESPN’s interest in Asian sports broadcasting joint venture company ESPN STAR Sports (ESS).

In June, ESPN, owned by The Walt Disney Company, and STAR, owned by News Corp, had called off their joint venture (JV), 16 years after it was formed. The two companies had entered into a definitive agreement under which STARTV-ATC, an indirectly wholly-owned subsidiary of News Corp, was scheduled to acquire ESPN’s 50 per cent equity in ESS. The proposed acquisition would result in a change in ownership of ESS India subsidiaries. The deal also meant News Corp would have complete control over ESS, which operates 25 television networks and three broadband networks covering 24 markets in Asia, while Disney would exit the sports segment in Asia.

Earlier, STARTV-ATC had appointed Dhall Law Chambers, headed by former CCI chairman Vinod Dhall, to file the pre-merger statement with CCI.

Taking to Business Standard, Dhall said, “The competition law in India requires every acquisition or merger above a certain threshold, in assets or turnover, to be looked into by CCI, if it would hurt the competition in any manner. So, according to the law, we filed with the CCI to get its approval.”

The CCI stated though the proposed combination resulted in the transfer of joint control to sole control, it would not result in the elimination of any competitor, as JV partners News Corp and ESPN were not competing for broadcasting of sports channels in India.

Dhall said, “The CCI observed the broadcasting sector was regulated by the Telecom Regulatory Authority of India, which has framed rules prescribing the maximum rate to be charged by a broadcaster for its channels. The mandatory sharing of live broadcasting signals for sporting events of national importance with Doordarshan constrains the bargaining strength of broadcaster vis-a-vis MSOs/DTH operators/advertisers.”

The CCI also considered the fact that channels like Ten Sports, Ten Action Plus, Ten Golf, Ten Cricket, DD Sports, Neo Prime, Neo Sports Plus and Sony Six posed competition for channels owned by ESS.