Carlton And Granada To Appeal To Regulators Over Merger
Carlton and Granada are expected to ask competition regulators to broaden the definition of the advertising market in which they operate, in a bid to secure approval for their proposed £2.6bn merger (see Carlton And Granada Move Closer To £2.6bn Single ITV Company).
According to a report in today’s Financial Times, the two ITV partners, who will submit their proposals to regulators before the end of the month, are expected to argue that they compete with radio, newspaper and magazine advertising.
If the market is extended, the regulatory hurdles, which currently stand in the way of the proposed merger (see ITV Merger Must Clear Regulatory Hurdles), are likely to be less stringent than if it was confined to TV advertising.
Carlton and Granada already control around 50% of the TV advertising market and the companies need approval from the ITC and the Office of Fair Trading before they can proceed with their plans.
Both parties, which are keen to push ahead with the merger, are also expected to appeal to regulators to look at the market share enjoyed by commercial broadcasters in other countries.
The ITV partners say they can generate around £50 million in savings if they are allowed to merge their sales operations. However, this has received strong opposition from rival commercial broadcasters and advertisers concerned that a single ITV sales house would have a detrimental effect on the market for airtime sales (see Rival Commercial Broadcasters Challenge £2.6bn ITV Merger).
Speaking at last week’s annual Media Question Time event, ISBA’s director of media and advertising affairs, Bob Wootton, said the sales issue would be the “deal breaker” for Carlton and Granada.
ITV’s commercial director, Jim Hytner, acknowledged the need to proceed cautiously to avoid alienating advertisers, but remained confident that a Carlton/Granada merger would be the best way forward for a “dysfunctional” ITV (see Carlton And Granada Merger Will Aid Dysfunctional ITV).
Carlton: 020 7663 6363 www.carlton.com Granada: 020 7620 1620 www.granadamedia.com
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