Ad Industry Welcomes Scrutiny Of Planned ITV Merger
The advertising industry and rival commercial broadcasters have welcomed the Government’s decision to refer the proposed merger of broadcasting giants, Carlton and Granada, to the Competition Commission (see ITV Merger Referred To Competition Commission).
Ian Twinn, ISBA’s director of public affairs, said: “TV advertising is a very large and significant market. Advertisers believe it is absolutely right that the Competition Commission should examine these implications in detail.”
He added: “Nevertheless, advertisers do not oppose the creation of a single ITV in principle. Indeed, they seek a strong ITV drawing the largest possible audiences and are open to further details from Carlton and Granada of how a single company ITV might be more likely to achieve this.”
Rival commercial broadcasters, led by Channel 4, have also welcomed the decision and are calling on the Competition Commission to consider the wider implications of a merged ITV company.
David Scott, Channel 4’s deputy chief executive, said: “Channel 4 is convinced that allowing a single company to control more than 50% of the television advertising market in the UK, through one sales house or two, is fundamentally anti-competitive.”
The IPA, which has been lobbying for a thorough investigation in to the implications of the proposed merger (see ITV Merger Must Clear Regulatory Hurdles), is urging the Competition Commission to consider the prospect that the formation of a single ITV sales house could set off a “chain reaction” in the consolidation of the sales activities of the other broadcasters.
The advertising body points out that if the merger goes ahead, the industry runs the risk of retaliation by Channel 4, Channel 5, BSkyB and GMTV in consolidating their own sales operations and so effectively reducing air-time sales competition in the UK TV market to two players.
Meanwhile, Shadow Secretary of State for Trade and Industry, Tim Yeo, is claiming that the decision to refer the merger to the competition authorities emphasises the outdated nature of the current media ownership regulations.
He said: “The Secretary of State’s involvement of the Competition Commission shows how unnecessary any special ownership rules in the media industry are. I have long advocated clearing the way for Carlton and Granada to merge, subject only to concerns about the sale of advertising.”
News of the referral, while not entirely unexpected (see Full Scrutiny Of ITV Merger Looks Inevitable), will come as a blow to Carlton and Granada, which claim that the merger is vital if they are to compete against an increasingly commercial BBC and the growing number of cable and satellite channels (see Carlton/Granada Move Closer To £2.6bn Single ITV Company).
Michael Green, chairman of Carlton, was keen to downplay the significance of the decision, saying: “This merger will not affect the competition for viewers. ITV is already one network and advertisers follow viewers and viewers follow programmes. We look forward to working with the Competition Commission over the coming months.”
However, Charles Allen, executive chairman of Granada, emphasised that the ITV partners are determined to achieve their goal. He said: “A united ITV can become a counterbalancing force in British television that can grow in the future and deliver for our viewers, advertisers and shareholders.”