NewsLine Column: Don’t Look Back In Anger
Geoffrey Russell, director of media affairs at the IPA, looks back at how the £4.5 billion merger of Carlton and Granada dominated the media landscape in 2003. He also considers what effect one of the biggest deals in broadcasting history will have on advertisers in the year to come…
It’s been a long 12 months.
There will be a lot of people glad to see the back of 2003. And a lot of others for whom it has opened the door on a whole new landscape of opportunity.
Of course, major things have been happening right across the media during the last 12 months – but for those of us touched by television, the world seems that it might never be quite the same again.
But then we all knew this was likely to be the case – the Communications Bill (which became an Act in July) had seen to that.
It started in January with the first batch of super-recruits for new, all-encompassing media regulator, Ofcom. We’d known about Davie Carrie since the previous August, but he was soon to be joined by Stephen Carter and a whole host of big-hitters straining at the leash to prove themselves in one of the world’s most complex marketplaces.
And then there was ITV – or more specifically Carlton and Granada.
This, of course, was the big one.
By early February, advertisers and broadcasters were already in full battle cry as the Office of Fair Trading overran its traditional 45 day deadline before referring the proposed merger to the Competition Commission to investigate in March.
Thereafter, the IPA, ISBA and all the TV operators found themselves ever more frequent visitors to the Commission’s strangely forbidding headquarters in Carey Street. Not that Professor Geroski and his panel were ever less than genial and scrupulously polite as they struggled over the intricacies of Station Average Price and a system in which everyone seemed to get a discount.
But whole forest fell as summer passed and submission after submission was followed by remedies, responses and further remedies.
The sticking point was, of course, the potential power a combined Carlton and Granada sales house, might have over the UK airtime market.
The advertisers and media agencies were united against any merger, unless the broadcasters were forced to sell off their sales houses to operate independently (the so-called structural remedy).
Carlton and Granada unsurprisingly saw this as a deal breaker – although, for a time, things looked promising with even Chas Allen of Granada saying at the end of September that he would examine any OFT ruling which required divestment “to see if we can make it work”.
In the end, he didn’t have to. In October, Patricia Hewitt came down in favour of allowing the merger with a behavioural (vs structural) sales remedy.
The result was the formed Contract Rights Renewal (CRR) – whose formula caused many a head of TV to regret giving up maths at ‘O’ level. And which resulted in another doomsday title to go alongside the regulator – the Adjudicator.
Wise heads shook and commentators sighed at the feasibility of getting things off the ground in time for the Christmas buying season and then, in a flash, it was there. In December David Connolly donned his (no doubt tartan) Adjudicator’s robes and thanks to two months of 15 hour days by Ofcom, most of the industry had been consulted and briefed on what the new system might means for them.
In truth, no-one really knows as yet what will happen. The proof of this particular seasonal pudding will very much lie in its eating.
And so, with CRR, the year has drawn to a close. No doubt, for Charles Allen, his Christmas stocking looked larger and fatter than last year. For advertisers and media agencies, the picture is less clear-cut.
However, if you thought the Christmas tree was safe – watch out. Already, Ofcom has its critical review of public service broadcasting in the marketplace – with a deadline of end January. And with the temperature hotting up for the BBC Charter Renewal in 2006, there’ll be a lot more trees falling to provide the industry’s inquiry resulting paperwork for 2004.
Meanwhile most of us have day jobs. It could be a busy New Year.
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