Competition Commission May Delay ITV Merger Verdict
The Competition Commission may delay its report to the Government on the proposed £2.6 billion merger of Carlton and Granada in order to further consult advertisers and rival broadcasters.
The Commission was due to report the findings of its enquiry into the creation of a single ITV and suggest its recommended remedies for competition concerns to Trade and Industry Secretary, Patricia Hewitt, by 25 June.
However, it announced yesterday that it may need more time to consider its verdict following Carlton and Granada’s last minute attempt to gain approval for the merger by proposing to directly link advertising rates with audience figures.
The Commission said: “We have received a number of proposals for remedies which we are currently considering. If the group were to consider it necessary to consult on these, given the proximity of the reporting date, it might be necessary to seek an extension.”
It is understood that the Commission can only apply for one extension during the course of an investigation, which can be for a maximum of three months.
The Commission’s concerns centre on the fact that a single ITV company would control more than 50% of the television advertising market. Advertisers are keen to see a strong ITV capable of delivering large audiences, but warn that a single sales house could could distort competition in the market for airtime sales, with increased prices for advertisers and media buying agencies (see ITV Merger Must Clear Regulatory Hurdles).
Earlier this year the Competition Commission published a list of “hypothetical” remedies that could come about if the merger is found to be against the public interest. These included plans for Carlton and Granada to sell their sales houses to be run as independent entities (see Carlton And Granada May Have To Sell Sales Houses). A suggestion which prompted Carlton chairman, Michael Green, to threaten to call off the merger altogether (see Carlton Boss Threatens To Halt Planned ITV Merger).
However, last month the Commission also said it would consider banning share deals, which see advertisers agree to commit a proportion of their budget to ITV in return for air-time discounts (see Competition Commission May Ban ITV Share Deals).
This prompted Carlton and Granada to propose linking advertising rates with audience figures in a scheme that would see ITV charge less for advertising if its audiences decreased (see ITV May Link Advertising Rates To Audience Figures).
Earlier this week reports emerged that US billionaire Haim Saban and the private equity group Apax Partners have a well-advanced plan to buy into ITV, following the successful merger of Carlton and Granada. Neil Blackley, the former head of media research at Merrill Lynch, is also believed to be assembling a special team to support a bid.
Competition Commission: 0207 271 0100 www.competition-commission.org.uk ITV: 020 7843 8000 www.itv.com
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