The prospect of a merger between ITV partners Carlton and Granada has been thrown into turmoil by reports that regulators have rejected the groups’ key proposals to save the deal.
According to the Observer, the Competition Commission have thrown out two plans which would have enabled the companies to keep at least one advertising sales house.
In the first scheme, Carlton and Granada proposed to sell off air time to a third party to auction on but this was apparently dismissed as “unworkable”.
The second scenario would have seen the ITV partners provide discounts to advertisers who bought in bulk if the programmes failed to deliver sufficient audiences (see ITV May Link Advertising Rates To Audience Figures). However, this suggestion was also rejected as only half of buyers purchase advertising in this way.
The creation of a single sales house and its effect on the ad sales market has been a key sticking point of the merger deal with some advertisers arguing it would create an untenable situation (see Advertisers Strengthen Opposition To ITV Merger).
However, Carlton chairman, Michael Green, has threatened to call off the proposed merger if the ITV groups are forced to sell their advertising sales houses (see Carlton Boss Threatens To Halt Planned ITV Merger).
The Commission’s stance puts the whole future of the merger, seen in many circles as the last chance for a healthy independent sector in British TV, in jeopardy. Further obstacles may also be created by Lord Puttnam’s plurality test amendment to the Communications Bill (see Government Ends Media Ownership Deadlock).
The merger plans have been fraught with difficulties, highlighted by the Competition Commission’s decision to extend its investigation by two months (see Competition Commission Delays Verdict On ITV Merger), although ITV executives have been keen to play down the problems.
By contrast, media analysts have criticised the haphazard nature of the proposals and the uncertainty created by the drawn out wrangling, which has been exacerbated by management tensions at Carlton and Granada.
