🔗 Share this article

The prospect of the American media conglomerate purchasing ITV has prompted apprehensions about the impact on the UK's public service broadcasting, a fact that the broadcaster's new chief executive, joining from a senior post at Sky, will be acutely aware of.

Sky’s ad sales head, Priya Dogra, will now be expected to spearhead efforts to oppose her ex-company's acquisition bid to defend Channel 4.

The potential merger of Sky and ITV’s terrestrial and streaming assets would leave Channel 4 a relative commercial minnow in the realm of TV and digital ad sales, reigniting discussion of the need to reconsider some form of tie-up with the BBC for continued existence.

Foremost Worry: The Future of News

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

The surprise news last month that Comcast, which holds assets including Universal Studios and purchased 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 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 purchase of ITV’s television business and streaming service, which would end 70 years of autonomy, is laden with regulatory, political, and competition issues.

Immediately, Comcast would control Sky News and ITV News—including its sprawling regional news operation—and become the largest 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 non-BBC broadcasters.

“If a deal materialises, the fate of ITN is an interesting 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.”

Funding Guarantees and Regulatory Scrutiny

Comcast promised 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 ending, 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 thought that any deal to buy ITV would include pledges not to seek permission from media regulator Ofcom to vary the conditions of its public service broadcast licence, which includes commitments 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.”

A System Under Threat

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 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 “at-risk model” 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.

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, 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 compels 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 necessitate 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 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.”

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

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