ITV May Link Advertising Rates To Audience Figures

Carlton and Granada have reportedly proposed directly linking advertising rates with audience figures in an attempt to save their planned £2.7 billion merger.

According to reports in The Times, the offer is part of a final round of trading between the ITV companies and the Competition Commission in a last ditch attempt to gain approval for the merger. Under the plans, ITV would charge less for their advertising if audiences decreased and would tie advertising rates explicitly to ratings performance.

The scheme is the latest in a long line of proposals and re-evaluations put forward by the ITV groups to promote the benefits of deal. The merger plans have been vigorously opposed by rival broadcasters (see ITV Merger Must Clear Regulatory Hurdles), industry bodies and leading clients who argued the combined force of the groups’ sales houses will distort competition in the market.

Analysts have suggested the merger will not be allowed if the group’s sales houses are combined. However, Carlton chairman, Michael Green, has threatened to call off the proposed merger with Granada if the two are forced to sell their advertising sales houses (see Carlton Boss Threatens To Halt Planned ITV Merger). Critics of the merger believe this focus on advertising sales reflects the commercial imperatives of the deal and undermines the companies continued assertions the merger will provide better programming and be in the viewers interest.

The Commission will make its decision by June 25th, and the recommendations will then be forwarded to the trade and industry secretary, Patricia Hewitt.

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