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

The prospect of Comcast acquiring ITV has sparked concerns about the consequences on the UK's public service broadcasting, a situation that Channel 4’s new top boss, moving from a high-ranking position at Sky, will be all too well aware of.

Sky’s ad sales head, Priya Dogra, will now be tasked to take a leading role to oppose her former employer’s takeover plan to protect Channel 4.

The proposed 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, fueling debate of the need to revisit some form of alliance with the BBC for future viability.

Foremost Worry: The Future of News

However, it is the potential ramifications 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 purchased Rupert Murdoch’s Sky for £30bn in 2018, is financially rational. Traditional broadcasters are facing a profound survival challenge as audiences and revenues continue to decisively move to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s move 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 full of regulatory, political, and competition concerns.

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 dominant share—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 non-BBC broadcasters.

“If a deal goes through, 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 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 obligation draws closer to concluding, 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 thought that any deal to buy ITV would include pledges not to seek permission from media regulator Ofcom to change the conditions of its public service broadcast licence, which includes duties to national and regional news.

“There are definitely questions about diversity of voice,” 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.”

Pressure on Public Service

British TV executives have previously cautioned about 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 “at-risk model” as viewers migrate to US online platforms and streamers.

The watchdog also revealed data showing that YouTube had surpassed 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 backdrop of the viewer shift to mostly US digital companies, heralds the need for closer collaboration 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 giant, 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 necessitate 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 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 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 core budgetary challenge,” 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 reach its limits.”

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