The Government has agreed to allow ITV licence holders to take full control of ITN following a last minute amendment to the Communications Bill.
Ministers have previously been unwilling to lift the current restrictions, which prevent individual shareholders owning more than 40% of the commercial news provider that produces News At Ten and Channel 4 News.
However, the concession was announced yesterday by Broadcast Minister, Lord McIntosh, in an attempt to avoid an embarrassing defeat at the hands of a cross-party alliance of peers in the House of Lords.
Carlton and Granada have long been lobbying for a change that would allow them to take full control of ITN ahead of their planned £2.6 billion merger (see ITV Merger Must Clear Regulatory Hurdles). The concession will allow the ITV partners, which each control 20% of the company, to swoop on the remaining 60%, which is jointly owned by United Business Media, Reuters and the Daily Mail & General Trust.
The decision has been welcomed by ITN, which believes its long-term future will be strengthened by the move. The company’s chairman, Mark Wood, said recently: “You don’t need to regulate the ownership to regulate what goes on the screen.”
However, even if ITN is wholly owned by Carlton and Granada it will still have to bid for the ITV news contract, which comes up for renewal periodically. Last year, ITN was forced to cut the annual cost of its contract with ITV by £10 million to £35 million following a counter bid from a rival consortium led by BSkyB.
Earlier today the Government confirmed it has ended the deadlock over the relaxation of the media ownership regulations and has agreed to accept Lord Puttnam’s plurality test amendment to the Communications Bill (see Government Ends Media Ownership Deadlock).
