🔗 Share this article

The idea of the American media conglomerate purchasing ITV has raised worries about the consequences on British public service broadcasting, a reality that the broadcaster's new chief executive, 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 former employer’s acquisition bid to defend Channel 4.

The envisaged merger of Sky and ITV’s broadcasting operation would leave Channel 4 a significantly weaker competitor in the realm of TV and digital ad sales, fueling talk of the need to reconsider some form of partnership with the BBC for future viability.

Foremost Worry: The Future of News

However, it is the likely impacts on the future of news provision that are causing the most immediate alarm for many within the television industry.

The shock revelation last month that Comcast, which holds assets including Universal Studios and bought Rupert Murdoch’s Sky for £30bn in 2018, makes commercial sense. Traditional broadcasters are facing a deep-seated viability crisis 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 autonomy, is full of regulatory, political, and competition problems.

Overnight, Comcast would control Sky News and ITV News—including its far-reaching 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 dominant share—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 pivotal one that will become a priority politically,” notes one senior TV executive. “Effectively, they will be involved in the news output of all the biggest non-BBC channels.”

Investment Promises and Regulatory Scrutiny

Comcast promised 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 concluding, 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 make losses of as much as £80m.

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

“There are definitely 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 appreciate ways of solving these problems.”

Pressure on Public Service

British TV executives have previously warned of 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 “endangered species” 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.

The Need for Unity

There are those who believe that a Sky takeover of ITV, against the context of the viewer shift to mostly US digital companies, heralds the need for closer cooperation 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 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 compels 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 necessitate 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 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.”

Funding Problems 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 beaten the predictions, but that is just delaying the inevitable. It’s now beginning to run out of road.”

The continuing debate emphasises a wider question for British media: how to preserve a domestic voice and a diverse public service ecosystem in an increasingly globalised and digitally dominated landscape.