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

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

Sky’s commercial director, Priya Dogra, will now be looked to to take a leading role to block her ex-company's acquisition bid to safeguard Channel 4.

The envisaged union of Sky and ITV’s terrestrial and streaming assets would leave Channel 4 a much smaller player in the realm of TV and digital ad sales, reviving discussion of the need to re-examine some form of tie-up with the BBC for long-term survival.

Primary Concern: 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 surprise news last month that Comcast, which controls assets including Universal Studios and acquired Rupert Murdoch’s Sky for £30bn in 2018, makes commercial sense. 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 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 full of regulatory, political, and competition concerns.

Overnight, 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 dominant share—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 commercial broadcasters.

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

Investment Promises and Regulatory Scrutiny

Comcast promised 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 obligation draws closer to ending, 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 lose money of as much as £80m.

It is thought that any deal to buy ITV would include assurances not to seek permission from media regulator Ofcom to alter 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 gain influence... I would hope Comcast realise ways of solving these problems.”

An Endangered Model

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 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 “endangered species” 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.

A Call for Collaboration

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 cooperation 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 compels 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 necessitate 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 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.”

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 postponing the problem. It’s now beginning to reach its limits.”

The ongoing saga highlights a wider dilemma for British media: how to safeguard a independent voice and a healthy public service ecosystem in an ever more globalised and digitally dominated landscape.