UK Watchdog Denies Reaching Decision Over ITV Sales Units

08 July 2003

Weekend reports that Britain’s Competition Commission had rejected ad sales compromise proposals put forward by Carlton Communications and Granada Media [WAMN: 07-Jul-03] were false – or at least premature – according to a statement issued Monday by the regulator.

Rebutting Sunday’s story in The Observer newspaper, the terse statement read: “The Competition Commission have not decided anything yet. The investigation is ongoing and we will report to the Secretary of State by August 26.”

It, however, did not specifically deny the substance of The Observer’s report.

Advertisers and agencies are profoundly uneasy about the concept of a merger between ITV’s dominant duo, which between them command over 50% of the nation’s TV adspend.

The objectors have specifically focused their hostility on Carlton and Granada’s plan to merge their respective sales organizations – a move ad buyers fear will lead to higher rates and quasi-control of the TV airtime market. They see the pair’s compromise proposals as cosmetic.

Opines ISBA (the Incorporated Society of British Advertisers): “There is some doubt as to whether specific technical remedies would solve the fundamental problem of the dominance in the airtime market that a single ITV would have.”

Geoff Russell, director for media affairs at the Institute of Practitioners in Advertising agrees: “ In essence, advertisers would either be required to keep their media approach frozen in time – or face the alternative of finding themselves forced to negotiate with a monolithic single ITV sales house, which holds all the cards. Having established that ITV is essential and unsubstitutable for most major TV advertisers, you can understand our concerns.”

ITV's case for a unified sales unit was crystallized by Carlton chairman Michael Green in a recent interview: “What would be the point of being divorced from our principal income stream? It would not make commercial sense.”

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