🔗 Share this article

The idea of Comcast taking over ITV has prompted worries about the effect on the UK's public service broadcasting, a reality that the broadcaster's new chief executive, who previously held a key role at Sky, will be acutely aware of.

Sky’s advertising chief, Priya Dogra, will now be expected to take a leading role to block her former employer’s takeover plan to safeguard Channel 4.

The potential merger of Sky and ITV’s broadcasting operation would leave Channel 4 a significantly weaker competitor in the realm of TV and digital ad sales, reigniting discussion of the need to re-examine some form of partnership with the BBC for future viability.

Immediate Alarm: The Future of News

However, it is the possible consequences 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 holds assets including Universal Studios and acquired Rupert Murdoch’s Sky for £30bn in 2018, is financially rational. Traditional broadcasters are facing a deep-seated viability crisis 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 nervousness among media watchers, with specific worry for news provision.”

However, the potential £1.6bn purchase of ITV’s television business and streaming service, which would end 70 years of autonomy, is riddled with regulatory, political, and competition concerns.

Immediately, Comcast would control Sky News and ITV News—including its extensive 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 controlling stake—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 pivotal 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 promised 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 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 lose money 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 alter the conditions of its public service broadcast licence, which includes duties 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 wield power... I would hope Comcast understand ways of solving these problems.”

An Endangered Model

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 acquired 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 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 landscape of the viewer shift to mostly US digital companies, heralds 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 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 obligates 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 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 passed,” 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.”

The Precarious Position of Channel 4 and the BBC

Channel 4, which relies on advertising for the vast majority of its income, now faces a eroded 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 defied expectations, but that is just postponing the problem. It’s now beginning to face a crunch point.”

The ongoing saga emphasises a broader conundrum for British media: how to preserve a independent voice and a diverse public service ecosystem in an progressively globalised and digitally dominated landscape.