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

The prospect of the American media conglomerate acquiring ITV has prompted apprehensions about the impact on British public service broadcasting, a reality that the broadcaster's new top boss, joining from a senior post at Sky, will be acutely aware of.

Sky’s advertising chief, Priya Dogra, will now be looked to to lead the charge to thwart her former employer’s buyout proposal to defend Channel 4.

The proposed merger of Sky and ITV’s TV business would leave Channel 4 a much smaller player in the realm of TV and digital ad sales, reviving talk of the need to revisit some form of alliance with the BBC for future viability.

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 surprise news last month that Comcast, which controls assets including Universal Studios and bought Rupert Murdoch’s Sky for £30bn in 2018, is a logical business move. Traditional broadcasters are facing a deep-seated viability crisis as audiences and revenues continue to decisively move to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s bid for ITV is causing unease among media watchers, with specific worry for news provision.”

However, the potential £1.6bn purchase of ITV’s broadcasting arm and streaming service, which would end 70 years of autonomy, is laden with 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 majority holding—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 materialises, the fate of ITN is an interesting 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.”

Investment Promises and Regulatory Scrutiny

Comcast guaranteed 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 commitment draws closer to expiring, 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 pledges 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 clearly questions about plurality,” 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 assert control... I would hope Comcast understand ways of solving these problems.”

A System Under Threat

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 “threatened entity” as viewers migrate to US online platforms and streamers.

The watchdog also revealed data showing that YouTube had exceeded 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 wants and needs 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 powerhouse, 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 broaden the definition 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.”

Structural Challenges of Channel 4 and the BBC

Channel 4, which relies on advertising for the vast majority of its income, now faces a weakened 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 beaten the predictions, but that is just delaying the inevitable. It’s now beginning to face a crunch point.”

The ongoing saga underscores a wider conundrum for British media: how to maintain a domestic voice and a diverse public service ecosystem in an ever more globalised and digitally dominated landscape.