🔗 Share this article

The possibility of the American media conglomerate taking over ITV has prompted worries about the impact on the UK's public service broadcasting, a reality that Channel 4’s new CEO, joining from a high-ranking position at Sky, will be all too well aware of.

Sky’s advertising chief, Priya Dogra, will now be tasked to lead the charge to oppose her ex-company's acquisition bid to protect Channel 4.

The envisaged union of Sky and ITV’s terrestrial and streaming assets would leave Channel 4 a relative commercial minnow in the realm of TV and digital ad sales, fueling debate of the need to revisit some form of alliance with the BBC for future viability.

Foremost Worry: The Future of News

However, it is the possible consequences 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 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 trepidation among media watchers, with particular concern for news provision.”

However, the potential £1.6bn purchase of ITV’s broadcasting arm and streaming service, which would end 70 years of independence, is laden with regulatory, political, and competition problems.

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 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 non-BBC broadcasters.

“If a deal is completed, the fate of ITN is an pivotal one that will focus minds politically,” notes one senior TV executive. “Effectively, they will be involved in the news output of all the biggest non-BBC channels.”

Funding Guarantees 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 assurance draws closer to expiring, 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 make losses of as much as £80m.

It is believed 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 commitments 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 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 “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.

A Call for Collaboration

There are those who believe that a Sky takeover of ITV, against the backdrop of the viewer shift to mostly US digital companies, heralds 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 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 compels 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 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 core budgetary challenge,” says Patrick Barwise, an emeritus professor at London Business School. “Channel 4 has repeatedly outperformed forecasts, but that is just delaying the inevitable. It’s now beginning to reach its limits.”

The continuing debate underscores a broader conundrum for British media: how to preserve a distinctive voice and a healthy public service ecosystem in an progressively globalised and digitally dominated landscape.