🔗 Share this article

The possibility of the American media conglomerate taking over ITV has sparked worries about the consequences on British public service broadcasting, a situation that Channel 4’s new chief executive, moving from a key role at Sky, will be keenly aware of.

Sky’s ad sales head, Priya Dogra, will now be looked to to spearhead efforts to thwart her ex-company's takeover plan to protect Channel 4.

The envisaged union 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, reviving debate of the need to reconsider some form of alliance with the BBC for future viability.

Foremost Worry: The Future of News

However, it is the possible consequences on the future of news output that are causing the most present anxiety for many within the television industry.

The surprise news last month that Comcast, which controls assets including Universal Studios and purchased Rupert Murdoch’s Sky for £30bn in 2018, is financially rational. Traditional broadcasters are facing a long-term existential threat 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 especial focus for news provision.”

However, the potential £1.6bn takeover of ITV’s television business and streaming service, which would end 70 years of autonomy, is riddled with regulatory, political, and competition concerns.

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 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 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, upping its funding annually in line with inflation, as part of its 2018 takeover of Sky. As that obligation 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 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 change the conditions of its public service broadcast licence, which includes obligations 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 wield power... I would hope Comcast understand ways of solving these problems.”

An Endangered Model

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 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 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.

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, indicates the need for closer partnership 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 vital strategic need. 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 giant, 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 widen the scope 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 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 structural funding problem,” 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 reach its limits.”

The evolving situation emphasises a larger question for British media: how to preserve a distinctive voice and a robust public service ecosystem in an progressively globalised and digitally dominated landscape.