‘The UK Deserves Some Media Independent of US Control’: The US Giant's Bid for ITV Sharpens Minds

The prospect of Comcast purchasing ITV has prompted concerns about the effect on the UK's public service broadcasting, a situation that the broadcaster's new chief executive, joining from a high-ranking position at Sky, will be keenly aware of.

Sky’s commercial director, Priya Dogra, will now be tasked to lead the charge to oppose her former employer’s buyout proposal to defend Channel 4.

The proposed merger of Sky and ITV’s terrestrial and streaming assets would leave Channel 4 a much smaller player in the realm of TV and digital ad sales, reviving debate of the need to revisit some form of alliance with the BBC for long-term survival.

Immediate Alarm: The Future of News

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

The surprise news last month that Comcast, which owns assets including Universal Studios and acquired Rupert Murdoch’s Sky for £30bn in 2018, is financially rational. Traditional broadcasters are facing a profound survival challenge 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 trepidation among media watchers, with specific worry 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 riddled with regulatory, political, and competition concerns.

Immediately, Comcast would control Sky News and ITV News—including its extensive 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 controlling stake—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 non-BBC broadcasters.

“If a deal is completed, the fate of ITN is an pivotal one that will focus minds politically,” says 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, raising 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 operate at a deficit 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 vary the conditions of its public service broadcast licence, which includes obligations to national and regional news.

“There are certainly 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 wield power... I would hope Comcast understand ways of solving these problems.”

Pressure on Public Service

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 “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.

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, heralds the need for closer cooperation 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.

Competition Hurdles

Any deal will prompt an investigation by the UK competition watchdog. Sky is hoping the regulator will broaden the definition 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.”

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 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 reach its limits.”

The ongoing saga highlights a larger question for British media: how to safeguard a domestic voice and a robust public service ecosystem in an ever more globalised and digitally dominated landscape.