‘The UK Needs Some Media Independent of US Control’: The US Giant's Takeover Attempt for ITV Starts to Focus Minds

The prospect of Comcast purchasing ITV has prompted apprehensions about the impact on British public service broadcasting, a situation that the broadcaster's new chief executive, moving from a high-ranking position at Sky, will be all too well aware of.

Sky’s commercial director, Priya Dogra, will now be tasked to spearhead efforts to block her former employer’s takeover plan to safeguard Channel 4.

The envisaged combination 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 talk of the need to revisit some form of partnership 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 urgent concern for many within the television industry.

The shock revelation last month that Comcast, which owns assets including Universal Studios and bought Rupert Murdoch’s Sky for £30bn in 2018, is a logical business move. Traditional broadcasters are facing a deep-seated viability crisis 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 unease among media watchers, with especial focus for news provision.”

However, the potential £1.6bn acquisition of ITV’s television business and streaming service, which would end 70 years of autonomy, is riddled with regulatory, political, and competition issues.

Overnight, Comcast would control Sky News and ITV News—including its far-reaching 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 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 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, upping 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 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 alter the conditions of its public service broadcast licence, which includes duties to national and regional news.

“There are certainly questions about media diversity,” 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 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 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 requires and deserves 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 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 approved,” 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 beaten the predictions, but that is just delaying the inevitable. It’s now beginning to face a crunch point.”

The ongoing saga emphasises a wider dilemma for British media: how to safeguard a domestic voice and a diverse public service ecosystem in an progressively globalised and digitally dominated landscape.