UK TV Firms Await Competition Commission Verdict On Merger

by Robin Pilgrim, LawAndTax-News.com, London

07 October 2003

UK television companies, Granada and Carlton are set to learn soon whether their planned merger has received the approval of the EU's Competition Commission, which in turn is likely to influence the Department of Trade and Industry's (DTI) decision on the matter.

According to reports in the national media, industry observers believe that the proposed £3.8 billion alliance will be permitted, but that there are likely to be some fairly sizeable strings attached.

One major condition which is expected to be part of any deal is that if the two ITV firms merge, they must divest their advertising sales houses, and allow them to be run separately from the broadcasting and production operations.

However, given the fact that both firms derive the majority of their revenue from advertising sales, this is unlikely to be a popular proposition. Speaking at a recent press conference, German TV mogul, Haim Saban warned that such a turn of events would also be likely to put off future investors.

Announcing that he would "not invest one dollar" in ITV if the advertising sales operations were spun off from the broadcasting unit, Mr Saban continued:

"We think the idea of separating the ad sales from the company is absolutely insane, has no hold in reality and is a distortion of anything that makes commercial sense."

Recommended