🔗 Share this article

The prospect of Comcast purchasing ITV has sparked worries about the consequences on the UK's public service broadcasting, a situation that Channel 4’s new CEO, who previously held a high-ranking position at Sky, will be acutely aware of.

Sky’s commercial director, Priya Dogra, will now be looked to to take a leading role to oppose her former employer’s takeover plan to defend Channel 4.

The envisaged combination 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 reconsider some form of alliance with the BBC for future viability.

Foremost Worry: The Future of News

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

The surprise news last month that Comcast, which owns assets including Universal Studios and bought Rupert Murdoch’s Sky for £30bn in 2018, is financially rational. Traditional broadcasters are facing a long-term existential threat as audiences and revenues continue to rapidly migrate to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s advance for ITV is causing nervousness among media watchers, with particular concern for news provision.”

However, the potential £1.6bn acquisition of ITV’s broadcasting arm and streaming service, which would end 70 years of self-rule, 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 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 controlling stake—other shareholders include the owner of the Daily Mail, Thomson Reuters, and Informa—it would still be significantly influential in the news output of most of the main commercial broadcasters.

“If a deal goes through, the fate of ITN is an pivotal one that will become a priority politically,” comments one senior TV executive. “Effectively, they will be involved in the news output of all the biggest non-BBC channels.”

Financial Commitments and Regulatory Scrutiny

Comcast promised 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 assurance 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 make losses of as much as £80m.

It is understood that any deal to buy ITV would include assurances not to seek permission from media regulator Ofcom to change the conditions of its public service broadcast licence, which includes commitments to national and regional news.

“There are definitely 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.”

A System Under Threat

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 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 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 landscape of the viewer shift to mostly US digital companies, heralds the need for closer partnership 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 compels 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.

Competition 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.”

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 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 structural funding problem,” says Patrick Barwise, an emeritus professor at London Business School. “Channel 4 has repeatedly defied expectations, but that is just delaying the inevitable. It’s now beginning to face a crunch point.”

The evolving situation emphasises a wider question for British media: how to safeguard a distinctive voice and a healthy public service ecosystem in an increasingly globalised and digitally dominated landscape.