‘The UK Requires Some Media Free of US Control’: The US Giant's Move for ITV Starts to Focus Minds

The idea of Comcast taking over ITV has sparked apprehensions about the impact on the UK's public service broadcasting, a situation that Channel 4’s new chief executive, joining from a high-ranking position at Sky, will be all too well aware of.

Sky’s advertising chief, Priya Dogra, will now be looked to to lead the charge to oppose her ex-company's takeover plan to safeguard Channel 4.

The envisaged merger of Sky and ITV’s TV business would leave Channel 4 a relative commercial minnow in the realm of TV and digital ad sales, fueling debate of the need to revisit some form of alliance with the BBC for future viability.

Immediate Alarm: 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 shock revelation 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 long-term existential threat as audiences and revenues continue to decisively move to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s bid for ITV is causing nervousness among media watchers, with particular concern for news provision.”

However, the potential £1.6bn acquisition of ITV’s television business and streaming service, which would end 70 years of self-rule, is laden 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 deeply engaged in the news output of most of the main commercial broadcasters.

“If a deal goes through, 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.”

Financial Commitments and Regulatory Scrutiny

Comcast promised to keep funding Sky News for a decade, increasing its funding annually in line with inflation, as part of its 2018 takeover of Sky. As that commitment draws closer to concluding, 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 change the conditions of its public service broadcast licence, which includes obligations 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 appreciate 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 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 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.

A Call for Collaboration

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 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 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 prompt 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 passed,” 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 delaying the inevitable. It’s now beginning to face a crunch point.”

The continuing debate emphasises a broader conundrum for British media: how to maintain a independent voice and a healthy public service ecosystem in an increasingly globalised and digitally dominated landscape.