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

The prospect of the American media conglomerate purchasing ITV has prompted apprehensions about the effect on British public service broadcasting, a situation that Channel 4’s new CEO, moving from a high-ranking position at Sky, will be all too well aware of.

Sky’s ad sales head, Priya Dogra, will now be looked to to lead the charge to oppose her ex-company's acquisition bid to safeguard Channel 4.

The proposed combination of Sky and ITV’s TV business would leave Channel 4 a much smaller player in the realm of TV and digital ad sales, reigniting talk of the need to reconsider 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 shock revelation last month that Comcast, which controls assets including Universal Studios and purchased 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 rapidly migrate to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s move 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 concerns.

Immediately, 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 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 is completed, the fate of ITN is an critical 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.”

Financial Commitments and Regulatory Scrutiny

Comcast guaranteed 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 ending, concerns have been raised about whether the US company will continue to fully fund Sky News, which has an annual budget of £100m but is thought to lose money of as much as £80m.

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

“There are clearly questions about media diversity,” 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.”

A System Under Threat

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 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 “threatened entity” as viewers migrate to US online platforms and streamers.

The watchdog also revealed data showing that YouTube had exceeded 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 backdrop of the viewer shift to mostly US digital companies, indicates the need for closer collaboration between the UK’s biggest broadcasters.

“The UK must have 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.

The CMA's Role

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 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.”

Funding Problems of Channel 4 and the BBC

Channel 4, which relies on advertising for the vast majority of its income, now faces a weakened 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 outperformed forecasts, but that is just postponing the problem. It’s now beginning to face a crunch point.”

The continuing debate highlights a wider dilemma for British media: how to preserve a distinctive voice and a diverse public service ecosystem in an progressively globalised and digitally dominated landscape.