UK Airtime Adjudicator Faces First Test

26 February 2004

Britain's new airtime sales adjudicator David Connolly faces his first test after a standoff between commercial television giant ITV plc and the UK unit of Grey Global Group's MediaCom.

The media agency is trying to extract better terms from ITV for two newly won clients, Boots pharmacy chain and Churchill Insurance (whose combined spend is £60 million ($113m; €90m)). It has referred the issue to Connolly, the first time he has been called on to use his powers.

The position of airtime sales adjudicator was created by new communications supra-regulator Ofcom, following the merger of ITV's main shareholders Granada and Carlton Communications. The combined company controls over 50% of UK television ad revenues.

It is Connolly's job to oversee the Contract Rights Renewal system, a scheme designed to prevent the broadcaster from abusing its position to hike ad rates. However, ITV claims MediaCom is exploiting the new set-up in a bid to get better terms than it would if Carlton and Granada had not merged.

At issue is whether an agency can renegotiate terms for a new client and retain its deals for existing accounts. It is thought that both for Boots and Churchill, MediaCom vowed to improve terms with ITV as part of its successful pitch.

ITV is worried that if Connolly finds in favour of MediaCom, other advertisers that have recently changed agencies will seek a renegotiation of existing deals.

Data sourced from: BrandRepublic (UK); additional content by WARC staff