‘The UK Needs Some Media Independent of US Control’: The US Giant's Bid for ITV Starts to Focus Minds

The prospect of the American media conglomerate taking over ITV has raised concerns about the consequences on the UK's public service broadcasting, a fact that Channel 4’s new CEO, who previously held a key role at Sky, will be keenly aware of.

Sky’s ad sales head, Priya Dogra, will now be tasked to lead the charge to thwart her ex-company's buyout proposal to protect Channel 4.

The proposed union of Sky and ITV’s TV business would leave Channel 4 a much smaller player in the realm of TV and digital ad sales, fueling discussion of the need to revisit some form of alliance with the BBC for continued existence.

Foremost Worry: The Future of News

However, it is the potential ramifications on the future of news provision that are causing the most present anxiety for many within the television industry.

The shock revelation last month that Comcast, which owns assets including Universal Studios and purchased 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 rapidly migrate to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s advance for ITV is causing unease among media watchers, with especial focus for news provision.”

However, the potential £1.6bn acquisition of ITV’s broadcasting arm and streaming service, which would end 70 years of independence, is riddled with regulatory, political, and competition problems.

Immediately, 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 controlling stake—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 non-BBC broadcasters.

“If a deal is completed, the fate of ITN is an pivotal one that will focus minds politically,” notes one senior TV executive. “Effectively, they will be involved in the news output of all the biggest non-BBC channels.”

Funding Guarantees and Regulatory Scrutiny

Comcast pledged to keep funding Sky News for a decade, raising its funding annually in line with inflation, as part of its 2018 takeover of Sky. As that assurance draws closer to expiring, concerns have been raised about whether the US company will continue to fully fund Sky News, which has an annual budget of £100m but is thought to make losses 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 change the conditions of its public service broadcast licence, which includes obligations to national and regional news.

“There are clearly questions about diversity of voice,” 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 realise ways of solving these problems.”

An Endangered Model

British TV executives have previously cautioned about the risk posed to the UK’s system of public service broadcasters (PSBs) by large parts of the industry being taken over by US corporations.

Recently, Ofcom published a report warning that public service television, such as news provision and UK-focused content, risks becoming an “endangered species” as viewers migrate to US online platforms and streamers.

The watchdog also revealed data showing that YouTube had surpassed 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.

A Call for Collaboration

There are those who believe that a Sky takeover of ITV, against the landscape of the viewer shift to mostly US digital companies, signals the need for closer partnership between the UK’s biggest broadcasters.

“The UK must have 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 powerhouse, with the two companies’ sales houses controlling a dominant share of total ad spend on traditional TV and broadcasters’ streaming services.

The CMA's Role

Any deal will trigger 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.”

The Precarious Position of Channel 4 and the BBC

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 defied expectations, but that is just delaying the inevitable. It’s now beginning to run out of road.”

The ongoing saga emphasises a wider dilemma for British media: how to preserve a independent voice and a robust public service ecosystem in an ever more globalised and digitally dominated landscape.