Feature: Northern Star Rises Across ITV Network
A leading force in ITV has finally emerged as Granada Media made the pounce for the television assets of United News & Media just over a week ago. The £1.75 billion deal with UNM makes Granada the undisputed leader of Britain’s main commercial TV network. The group gains control of the Meridian, Anglia and HTV franchises, which, for Granada, is a great sweep into the south of England and Wales, substantially increasing the group’s national footprint.
However, current advertising and viewing restrictions prohibit Granada from owning all three of United’s franchises as well as its own; HTV, which covers Wales and the west of England, is expected to be sold off, probably to Carlton, as a result. Previously no one ITV company was permitted to control more than 25% of the Network’s total ad revenue. This was restriction was removed by the DTI last month ahead of the inevitable consolidation.
With the acquisition of UNM’s TV businesses, Granada will control approximately 55% of ITV’s revenue, according to average franchise revenue shares over the year to June 2000. Carlton’s franchises currently take around 34% of Network revenue. The DTI now stipulates that of the two main ITV companies, one must not control more than 1.27 times the revenue of its closest rival. If HTV is sold to Carlton, Granada’s share drops to 50% and Carlton’s rises to 39%, bringing the companies to within a whisker of the DTI rules. Granada plans to merge TSMS, United’s sales house, with its own Media Sales operation, creating a uniform southern proposition to advertisers.
A further restriction for Granada is the 15% viewing share limit. Combined with UNM’s franchises, Granada’s TV regions will command 17.3% of total television viewing – 56.9% of ITV viewing- according to ITC averages for the year to March. The bulk of this comes from Granada’s key North West franchise which takes 3.8% of TV viewing – 12.5% of ITV’s viewing. Again, the sale of HTV to Carlton is likely to appease the regulators; Granada’s share would fall to just over the limit at 15.1% and Carlton’s would rise from its current 8.0% to 10.2%.
Even following the sale of HTV to Carlton, Granada’s vastly augmented strength in ITV is apparent. It will control 50% of all advertising sales and 49.7% of all viewing to the Network will be made from its regional franchises which now reach the width and breadth of the country.