🔗 Share this article

The prospect of the American media conglomerate acquiring ITV has prompted apprehensions about the consequences on British public service broadcasting, a reality that the broadcaster's new top boss, who previously held a high-ranking position at Sky, will be keenly aware of.

Sky’s ad sales head, Priya Dogra, will now be expected to lead the charge to block her former employer’s buyout proposal to defend Channel 4.

The envisaged merger of Sky and ITV’s TV business would leave Channel 4 a much smaller player in the realm of TV and digital ad sales, reviving talk of the need to revisit some form of alliance with the BBC for long-term survival.

Foremost Worry: 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 acquired 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 move for ITV is causing trepidation among media watchers, with especial focus for news provision.”

However, the potential £1.6bn acquisition of ITV’s television business and streaming service, which would end 70 years of autonomy, is full of regulatory, political, and competition problems.

Immediately, 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 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 critical one that will concentrate attention politically,” comments 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 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 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 operate at a deficit of as much as £80m.

It is believed 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 gain influence... I would hope Comcast realise ways of solving these problems.”

Pressure on Public Service

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 “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.

Strategic Imperatives

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 collaboration 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 requires 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 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.”

Structural Challenges 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 delaying the inevitable. It’s now beginning to face a crunch point.”

The continuing debate underscores a broader dilemma for British media: how to preserve a independent voice and a healthy public service ecosystem in an ever more globalised and digitally dominated landscape.