‘The UK Needs Some Media Free of US Control’: The US Giant's Takeover Attempt for ITV Sharpens Minds

The idea of Comcast acquiring ITV has prompted worries about the impact on the UK's public service broadcasting, a fact that the broadcaster's new top boss, moving from a key role at Sky, will be all too well aware of.

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

The envisaged merger of Sky and ITV’s TV business would leave Channel 4 a much smaller player in the realm of TV and digital ad sales, fueling talk of the need to revisit some form of tie-up with the BBC for future viability.

Immediate Alarm: The Future of News

However, it is the potential ramifications on the future of news provision that are causing the most immediate alarm for many within the television industry.

The surprise news last month that Comcast, which holds assets including Universal Studios and acquired Rupert Murdoch’s Sky for £30bn in 2018, makes commercial sense. 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 move for ITV is causing nervousness 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 full of regulatory, political, and competition problems.

Immediately, Comcast would control Sky News and ITV News—including its extensive regional news operation—and become the biggest 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 significantly influential in the news output of most of the main commercial broadcasters.

“If a deal is completed, the fate of ITN is an interesting one that will concentrate attention politically,” notes 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 pledged 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 obligation draws closer to concluding, concerns have been raised about whether the US company will continue to completely finance Sky News, which has an annual budget of £100m but is thought to lose money of as much as £80m.

It is believed 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 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 appreciate ways of solving these problems.”

A System Under Threat

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 “endangered species” 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.

The Need for Unity

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 cooperation 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 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 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 necessitate 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 cleared,” 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.”

Funding Problems of Channel 4 and the BBC

Channel 4, which relies on advertising for the vast majority of its income, now faces a weakened 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 defied expectations, but that is just postponing the problem. It’s now beginning to run out of road.”

The ongoing saga emphasises a larger dilemma for British media: how to maintain a domestic voice and a diverse public service ecosystem in an ever more globalised and digitally dominated landscape.