Advertisers Welcome Delay On ITV Merger Judgement
Advertisers have welcomed the extension of Competition Commission’s inquiry into the proposed merger of Carlton and Granada as a sign that their concerns over the creation of a single ITV sales house are being addressed.
Trade and Industry Secretary, Patricia Hewitt, yesterday announced that the deadline for the Commission to report on the planned £2.6 billion deal had been pushed back to 26 August (see Competition Commission Delays Verdict On ITV Merger).
Both the ISBA and the IPA have voiced support for the move, which will give the Commission a further two months to investigate the effects of the merger on the market for airtime sales.
It is understood that Carlton and Granada are proposing to directly link advertising rates with ITV1’s audience figures, in an attempt to secure approval form the deal (see
ITV May Link Advertising Rates To Audience Figures
Bob Wootton, director of media and advertising affairs at ISBA, commented: “The Commission is obviously keen to carry out a full and proper investigation and to consider fully all possible remedies to ensure competition in the market for airtime sales is maintained. Competition in airtime is very important for UK advertisers. We therefore strongly welcome the extension and admire the Commission’s determination to carry out a thorough and comprehensive inquiry.”
The IPA has also welcomed the decision to extend the investigation, stating that ITV’s recent submission of further hypothetical remedies to the problems inherent in the creation of a single sales house had made the extension virtually inevitable.
Geoffrey Russell, director of media affairs at the IPA, commented: “The various proposals put forward are as ingenious in their construction as they are complex in their potential ramifications. However, whether they address at all the advertising industry’s fundamental concerns relating to the creation of a single ITV remains to be seen.”
The Competition Commission yesterday put forward a further two hypothetical remedies that could come about if the merger is found to be against the public interest. The first of these would require a percentage of ITV’s airtime budget to be auctioned off to a third party, whilst the second would involve promising advertisers that current share deals would be maintained next year.
ISBA: 020 7499 7502 www.isba.org.uk IPA: 020 7235 7020 www.ipa.co.uk
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