ITC Publishes Granada Mergers Issues Paper

The Independent Television Commission (ITC) has published an issues paper on the proposed acquisition by Granada group of United News and Media (UNM) or Carlton Communications, stating that in the form currently proposed, the mergers “would not in the view of ITC staff fit within the terms of current policy and legislation.”

The paper points out that under current ITC policy, no organisation or sales house can be responsible for more than 25% of total television advertising on all channels and all platforms. Granada has said that after disposals necessary to comply with limits on audience share, either merger would only result in a company controlling around 30 per cent of advertising revenue. The ITC says that smaller Channel 3 licensees must be considered. “Almost certainly they will want their airtime sold by a sales house, and the rules should not operate in a way which forces them to treat with a single house.”

Concern is also raised regarding the impact a Granada/Carlton merger would have on competition in the advertising merger through ownership of GMTV. “The combined company would own 50% of GMTV, which would reduce significantly the level of choice for advertisers,” the paper says. The same merger would also give the new company a controlling share of the votes for decisions relating to the operation of the ITV network. “The ITC already considers that greater concentration amongst Channel 3 licensees has adversely affected the regional identity of the ITV services,” the Commission says. Thus, “the proposed mergers in their current form would make the ITC’s task of ensuring regional diversity in ITV programming more difficult.”

Other issues raised by the paper include: the fact that either one of the planned Granada acquisitions would lead to a breach of the statutory audience limit; the issue of a combined Granada/Carlton putting both LWT and Carlton licences for the London area under the same company’s control, in breach of the Broadcasting Act 1990; and the fact that a public interest test would be needed if Granada and United merged, in consideration of United’s ownership of Express newspapers.

ITC: 020 7255 3000