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

The prospect of Comcast taking over ITV has raised worries about the effect on British public service broadcasting, a reality that the broadcaster's new chief executive, moving from a key role at Sky, will be acutely aware of.

Sky’s advertising chief, Priya Dogra, will now be looked to to spearhead efforts to oppose her former employer’s buyout proposal to protect Channel 4.

The proposed combination of Sky and ITV’s TV business would leave Channel 4 a relative commercial minnow in the realm of TV and digital ad sales, reigniting discussion of the need to reconsider some form of partnership with the BBC for future viability.

Primary Concern: 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 owns assets including Universal Studios and acquired Rupert Murdoch’s Sky for £30bn in 2018, makes commercial sense. 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 television business 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 sprawling 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 commercial broadcasters.

“If a deal materialises, 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.”

Investment Promises 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 thought 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 duties to national and regional news.

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

Pressure on Public Service

British TV executives have previously warned of 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 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.

Strategic Imperatives

There are those who believe that a Sky takeover of ITV, against the landscape of the viewer shift to mostly US digital companies, indicates the need for closer partnership 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 requires them to collaborate.”

Given that advertisers follow eyeballs, a combination of Sky and ITV could create a British TV and streaming powerhouse, 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 trigger 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.”

Structural Challenges 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 beaten the predictions, but that is just delaying the inevitable. It’s now beginning to run out of road.”

The evolving situation emphasises a broader dilemma for British media: how to maintain a independent voice and a healthy public service ecosystem in an progressively globalised and digitally dominated landscape.