‘The UK Needs Some Media Independent of US Control’: Comcast’s Takeover Attempt for ITV Concentrates Minds

The possibility of Comcast acquiring ITV has raised apprehensions about the impact on British public service broadcasting, a fact that the broadcaster's new CEO, joining from a senior post at Sky, will be keenly aware of.

Sky’s ad sales head, Priya Dogra, will now be looked to to spearhead efforts to oppose her ex-company's buyout proposal to protect Channel 4.

The envisaged combination 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 debate of the need to reconsider some form of tie-up with the BBC for continued existence.

Immediate Alarm: The Future of News

However, it is the likely impacts on the future of news provision that are causing the most present anxiety for many within the television industry.

The shock revelation 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 long-term existential threat 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 unease 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 self-rule, is laden with regulatory, political, and competition concerns.

At a stroke, 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 majority holding—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 non-BBC broadcasters.

“If a deal is completed, the fate of ITN is an critical 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.”

Funding Guarantees and Regulatory Scrutiny

Comcast guaranteed 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 commitment draws closer to expiring, 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 make losses 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 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 wield power... I would hope Comcast understand ways of solving these problems.”

An Endangered Model

British TV executives have previously cautioned about 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 overtaken 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, heralds the need for closer partnership between the UK’s biggest broadcasters.

“The UK must have 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 giant, 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 prompt 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.”

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 outperformed forecasts, but that is just delaying the inevitable. It’s now beginning to face a crunch point.”

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