🔗 Share this article

The possibility of the American media conglomerate acquiring ITV has prompted apprehensions about the impact on the UK's public service broadcasting, a situation that the broadcaster's new top boss, joining from a senior post at Sky, will be all too well aware of.

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

The proposed merger of Sky and ITV’s broadcasting operation would leave Channel 4 a much smaller player in the realm of TV and digital ad sales, reigniting debate of the need to reconsider 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 output that are causing the most present anxiety for many within the television industry.

The surprise news last month that Comcast, which controls assets including Universal Studios and purchased 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 trepidation among media watchers, with particular concern for news provision.”

However, the potential £1.6bn acquisition of ITV’s television business and streaming service, which would end 70 years of independence, is full of regulatory, political, and competition concerns.

Overnight, Comcast would control Sky News and ITV News—including its sprawling 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 dominant share—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 goes through, the fate of ITN is an interesting one that will concentrate attention politically,” says 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 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 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.”

A System Under Threat

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 “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.

Strategic Imperatives

There are those who believe that a Sky takeover of ITV, against the context of the viewer shift to mostly US digital companies, signals 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 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.

The CMA's Role

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 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.”

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 structural funding problem,” 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 run out of road.”

The ongoing saga highlights a broader dilemma for British media: how to preserve a domestic voice and a robust public service ecosystem in an increasingly globalised and digitally dominated landscape.