The idea of the American media conglomerate taking over ITV has raised apprehensions about the impact on British public service broadcasting, a situation that Channel 4’s new top boss, moving from a key role at Sky, will be keenly aware of.
Sky’s commercial director, Priya Dogra, will now be looked to to spearhead efforts to block her former employer’s acquisition bid to protect Channel 4.
The envisaged combination of Sky and ITV’s TV business would leave Channel 4 a relative commercial minnow in the realm of TV and digital ad sales, fueling talk of the need to revisit some form of alliance with the BBC for continued existence.
However, it is the possible consequences on the future of news provision that are causing the most urgent concern for many within the television industry.
The surprise news last month that Comcast, which owns assets including Universal Studios and acquired Rupert Murdoch’s Sky for £30bn in 2018, makes commercial sense. Traditional broadcasters are facing a long-term existential threat as audiences and revenues continue to decisively move to global digital players such as Meta, Google, Amazon, and Netflix.
“Comcast’s bid for ITV is causing trepidation among media watchers, with particular concern for news provision.”
However, the potential £1.6bn takeover of ITV’s broadcasting arm and streaming service, which would end 70 years of self-rule, is riddled with regulatory, political, and competition problems.
At a stroke, Comcast would control Sky News and ITV News—including its far-reaching regional news operation—and become the biggest shareholder in ITN, which produces news for ITV, Channel 4, and Channel 5.
While Comcast’s 40% stake in ITN would not be a majority holding—other shareholders include the owner of the Daily Mail, Thomson Reuters, and Informa—it would still be deeply engaged in the news output of most of the main commercial broadcasters.
“If a deal is completed, the fate of ITN is an critical one that will concentrate attention politically,” says one senior TV executive. “Effectively, they will be involved in the news output of all the biggest non-BBC channels.”
Comcast pledged to keep funding Sky News for a decade, upping its funding annually in line with inflation, as part of its 2018 takeover of Sky. As that assurance draws closer to concluding, concerns have been raised about whether the US company will continue to wholly support Sky News, which has an annual budget of £100m but is thought to operate at a deficit of as much as £80m.
It is thought that any deal to buy ITV would include pledges not to seek permission from media regulator Ofcom to alter the conditions of its public service broadcast licence, which includes duties to national and regional news.
“There are clearly questions about plurality,” says Stewart Puvis, a former ITN chief executive. “Theoretically, Comcast could, say, merge Sky and ITV News and use its position as a 40% shareholder in ITN to wield power... I would hope Comcast understand ways of solving these problems.”
British TV executives have previously highlighted the risk posed to the UK’s system of public service broadcasters (PSBs) by large parts of the industry being acquired by US corporations.
Recently, Ofcom published a report warning that public service television, such as news provision and UK-focused content, risks becoming an “at-risk model” as viewers migrate to US online platforms and streamers.
The watchdog also revealed data showing that YouTube had overtaken ITV to become the UK’s second most-watched media service, behind only the BBC, with it and Netflix now the two most popular first TV destinations among young people.
There are those who believe that a Sky takeover of ITV, against the context of the viewer shift to mostly US digital companies, signals the need for closer partnership between the UK’s biggest broadcasters.
“The UK requires and deserves its own part of mass media which isn’t US controlled,” says a second broadcasting executive. “It’s a vital strategic need. I think the government needs to work out how the boards of the PSBs have a new part to their remits that obligates them to collaborate.”
Given that advertisers follow eyeballs, a combination of Sky and ITV could create a British TV and streaming titan, with the two companies’ sales houses controlling a dominant share of total ad spend on traditional TV and broadcasters’ streaming services.
Any deal will prompt an investigation by the UK competition watchdog. Sky is hoping the regulator will broaden the definition of the ad market to include the impact of giants like YouTube and Facebook.
“I think it will get passed,” says Alex DeGroote, a media analyst. “Comcast will do everything it can to say it will maintain the PSB status quo... But you don’t buy to ultimately keep everything the same. ITV plus Sky would give them a hugely dominant position in the TV ad market.”
Channel 4, which relies on advertising for the vast majority of its income, now faces a eroded BBC as a potential partner and a formidable commercial threat from a combined Sky-ITV.
“We may at some point end up in that situation because of the deep cumulative cuts to the BBC’s funding and because Channel 4, too, has a inherent financial issue,” says Patrick Barwise, an emeritus professor at London Business School. “Channel 4 has repeatedly beaten the predictions, but that is just postponing the problem. It’s now beginning to face a crunch point.”
The ongoing saga highlights a broader question for British media: how to safeguard a distinctive voice and a diverse public service ecosystem in an progressively globalised and digitally dominated landscape.
A seasoned gaming enthusiast with over a decade of experience in reviewing online casinos and sharing winning strategies.
