‘The UK Requires Some Media Independent of US Control’: The US Giant's Bid for ITV Concentrates Minds

The prospect of the American media conglomerate taking over ITV has prompted worries about the impact on British public service broadcasting, a reality that Channel 4’s new CEO, moving from a key role at Sky, will be keenly aware of.

Sky’s ad sales head, Priya Dogra, will now be looked to to take a leading role to block her ex-company's acquisition bid to safeguard Channel 4.

The potential combination of Sky and ITV’s broadcasting operation would leave Channel 4 a significantly weaker competitor in the realm of TV and digital ad sales, reviving talk of the need to re-examine some form of alliance with the BBC for continued existence.

Primary Concern: The Future of News

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

The surprise news last month that Comcast, which owns assets including Universal Studios and purchased Rupert Murdoch’s Sky for £30bn in 2018, is a logical business move. Traditional broadcasters are facing a profound survival challenge as audiences and revenues continue to swiftly shift to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s advance for ITV is causing trepidation among media watchers, with specific worry for news provision.”

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

Overnight, Comcast would control Sky News and ITV News—including its sprawling 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 dominant share—other shareholders include the owner of the Daily Mail, Thomson Reuters, and Informa—it would still be heavily involved in the news output of most of the main commercial broadcasters.

“If a deal materialises, the fate of ITN is an interesting one that will focus minds politically,” comments 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 guaranteed 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 obligation draws closer to expiring, 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 make losses of as much as £80m.

It is thought that any deal to buy ITV would include guarantees not to seek permission from media regulator Ofcom to vary the conditions of its public service broadcast licence, which includes obligations to national and regional news.

“There are definitely 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 assert control... I would hope Comcast realise ways of solving these problems.”

A System Under Threat

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 snapped up 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 exceeded 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.

Strategic Imperatives

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

“The UK wants and needs its own part of mass media which isn’t US controlled,” says a second broadcasting executive. “It’s a national strategic imperative. 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.

Competition Hurdles

Any deal will trigger an investigation by the UK competition watchdog. Sky is hoping the regulator will expand the view of the ad market to include the impact of giants like YouTube and Facebook.

“I think it will get approved,” 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 diminished 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 core budgetary challenge,” 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 reach its limits.”

The continuing debate underscores a wider question for British media: how to safeguard a independent voice and a robust public service ecosystem in an increasingly globalised and digitally dominated landscape.