Carlton, Granada to Merge TV News Operations

29 July 2003

The awaited decision of the Competition Commission notwithstanding, Carlton Communications and Granada Media are pressing ahead with the pre-merger integration of their respective operations. The commission is due to hand its recommendations on the mooted marriage to trade and industry secretary Patricia Hewitt on August 26.

Approval is by no means certain, the UK advertising industry having robustly opposed the integration of Carlton and Granada’s respective sales houses into a single unit controlling over 50% of the nation’s TV advertising market.

But Carlton chairman Michael Green is on record as saying he would walk away from the merger if the commission rules against the sales unification: “What would be the point of being divorced from our principal income stream? It would not make commercial sense,” he argued. Few, however, attach much credence to his threat, believing it would be overturned by a massive shareholder revolt.

Meantime, the ITV duo this weekend announced the creation of a division combining their respective regional, national and international news operations. This new division will form the third arm of a merged ITV structural triumvirate, alongside production and broadcasting.

The merger, say the broadcasters, will save £12 million ($19.46m; €16.96m) on content expenditure and £12m from so-called “back of house” broadcasting and commissioning. Integration of the respective Carlton and Granada corporate structures would lop a further £12m from costs; while the contentious single advertising sales operation – if permitted – would slice £20m more from overheads.

Data sourced from: Financial Times; additional content by WARC staff