🔗 Share this article

The idea of the American media conglomerate acquiring ITV has prompted concerns about the consequences on the UK's public service broadcasting, a situation that the broadcaster's new top boss, who previously held a key role at Sky, will be acutely aware of.

Sky’s advertising chief, Priya Dogra, will now be tasked to lead the charge to thwart her former employer’s takeover plan to safeguard Channel 4.

The potential union 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 re-examine some form of partnership with the BBC for long-term survival.

Foremost Worry: The Future of News

However, it is the possible consequences 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 controls assets including Universal Studios and acquired Rupert Murdoch’s Sky for £30bn in 2018, is financially rational. Traditional broadcasters are facing a deep-seated viability crisis as audiences and revenues continue to decisively move to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s advance for ITV is causing unease among media watchers, with specific worry for news provision.”

However, the potential £1.6bn acquisition of ITV’s broadcasting arm and streaming service, which would end 70 years of self-rule, is laden with regulatory, political, and competition concerns.

Immediately, Comcast would control Sky News and ITV News—including its far-reaching 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 majority holding—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 pivotal 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 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 assurance draws closer to concluding, 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 operate at a deficit 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 vary the conditions of its public service broadcast licence, which includes commitments to national and regional news.

“There are clearly questions about plurality,” 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 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 “at-risk model” 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, heralds the need for closer collaboration between the UK’s biggest broadcasters.

“The UK wants and needs 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 giant, 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 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 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 core budgetary challenge,” says Patrick Barwise, an emeritus professor at London Business School. “Channel 4 has repeatedly defied expectations, but that is just delaying the inevitable. It’s now beginning to run out of road.”

The ongoing saga underscores a broader dilemma for British media: how to preserve a distinctive voice and a robust public service ecosystem in an ever more globalised and digitally dominated landscape.