🔗 Share this article

The idea of the American media conglomerate purchasing ITV has raised concerns about the impact on the UK's public service broadcasting, a reality that Channel 4’s new top boss, moving from a senior post at Sky, will be acutely aware of.

Sky’s advertising chief, Priya Dogra, will now be expected to lead the charge to thwart her former employer’s acquisition bid to safeguard Channel 4.

The proposed combination of Sky and ITV’s broadcasting operation would leave Channel 4 a significantly weaker competitor in the realm of TV and digital ad sales, reviving debate of the need to revisit some form of alliance with the BBC for continued existence.

Immediate Alarm: The Future of News

However, it is the potential ramifications on the future of news output that are causing the most urgent concern for many within the television industry.

The unexpected announcement last month that Comcast, which controls assets including Universal Studios and acquired 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 decisively move to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s bid for ITV is causing nervousness among media watchers, with especial focus 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 problems.

Immediately, Comcast would control Sky News and ITV News—including its extensive 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 controlling stake—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 is completed, the fate of ITN is an pivotal one that will become a priority 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 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 obligation draws closer to ending, 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 lose money of as much as £80m.

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

“There are definitely 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 realise ways of solving these problems.”

An Endangered Model

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 taken over 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.

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, heralds 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 key national priority. 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 trigger 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 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 underscores a broader dilemma for British media: how to preserve a distinctive voice and a diverse public service ecosystem in an ever more globalised and digitally dominated landscape.