🔗 Share this article

The prospect of the American media conglomerate purchasing ITV has sparked concerns about the effect on the UK's public service broadcasting, a fact that the broadcaster's new CEO, moving from a senior post at Sky, will be all too well aware of.

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

The proposed combination of Sky and ITV’s terrestrial and streaming assets would leave Channel 4 a significantly weaker competitor in the realm of TV and digital ad sales, fueling debate of the need to revisit some form of partnership with the BBC for future viability.

Immediate Alarm: The Future of News

However, it is the likely impacts 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 bought Rupert Murdoch’s Sky for £30bn in 2018, makes commercial sense. 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 bid for ITV is causing unease among media watchers, with particular concern 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 laden with regulatory, political, and competition concerns.

Overnight, Comcast would control Sky News and ITV News—including its sprawling regional news operation—and become the majority 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 materialises, the fate of ITN is an interesting one that will become a priority 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, upping 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 completely finance Sky News, which has an annual budget of £100m but is thought to operate at a deficit of as much as £80m.

It is understood 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 commitments 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 gain influence... I would hope Comcast understand ways of solving these problems.”

An Endangered Model

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 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 “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.

Strategic Imperatives

There are those who believe that a Sky takeover of ITV, against the landscape of the viewer shift to mostly US digital companies, indicates the need for closer partnership 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 key national priority. 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.

The CMA's Role

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

“I think it will get cleared,” 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 structural funding problem,” says Patrick Barwise, an emeritus professor at London Business School. “Channel 4 has repeatedly outperformed forecasts, but that is just postponing the problem. It’s now beginning to reach its limits.”

The ongoing saga emphasises a larger conundrum for British media: how to maintain a independent voice and a robust public service ecosystem in an progressively globalised and digitally dominated landscape.