🔗 Share this article

The idea of Comcast taking over ITV has sparked apprehensions about the impact on British public service broadcasting, a fact that Channel 4’s new chief executive, who previously held a key role at Sky, will be keenly aware of.

Sky’s commercial director, Priya Dogra, will now be tasked to take a leading role to thwart her ex-company's takeover plan to protect Channel 4.

The envisaged union of Sky and ITV’s TV business would leave Channel 4 a significantly weaker competitor in the realm of TV and digital ad sales, reigniting talk of the need to revisit some form of tie-up 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 immediate alarm for many within the television industry.

The unexpected announcement last month that Comcast, which owns 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 rapidly migrate 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 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 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 significantly influential in the news output of most of the main commercial broadcasters.

“If a deal goes through, the fate of ITN is an critical one that will become a priority 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, 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 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 clearly 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 wield power... I would hope Comcast realise ways of solving these problems.”

Pressure on Public Service

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 “threatened entity” 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, indicates the need for closer collaboration 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 requires 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.

Regulatory 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.”

Funding Problems 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 defied expectations, but that is just delaying the inevitable. It’s now beginning to run out of road.”

The evolving situation emphasises a larger dilemma for British media: how to maintain a distinctive voice and a robust public service ecosystem in an progressively globalised and digitally dominated landscape.