IPA Concerned Over Carlton/UNM Merger’s Effect On Airtime Sales

The proposed merger between Carlton Communications and United News & Media (UNM), announced last week (see Carlton/UNM Merged Group Plans For The Future), has sent the media world into frenzy, as the ITV network moves further towards consolidation. In particular, the advertising industry is fearful that when the six ITV franchises owned by the two groups are united, reduced competition will push up airtime sales costs and affect revenue.

Tomorrow, representatives from the Institute of Practitioners in Advertising (IPA) and the heads of Carlton and United plan to meet to discuss the issues involved. The main area of concern is the amount of advertising revenue that will be commanded by the new group.

Currently, the two companies’ six franchises account for almost 60% of ITV’s advertising revenue. The largest portion is taken by Carlton’s Central Television in the Midlands, which has taken an average 16.4% of all ITV ad revenue from January to October this year. Carlton’s London weekday franchise comes a close second; its average ad revenue this year stands at almost 16% of the total for ITV franchises, or £24.5 million.

It is Carlton and UNM’s combined revenue which is worrying the ad industry. The IPA currently states that no single group is able to control more than 25% of the national TV advertising revenue. The latest industry estimates, for the month of October, give a figure for the combined franchises of 36.8% of the total ad revenue for television.

The results of today’s meeting should give a clearer indication of how and if the merger will evolve. The IPA said last August that it would push for its current limits to remain. The Office of Fair Trading, however, is currently reviewing restrictions to the amount of advertising sales control which were laid down in 1994.

Carlton Communications: 0171 663 6363 United News & Media: 0171 921 5000 IPA: 0171 235 7020