British TV station Channel 4 has emerged as the driving force behind proposals for further consolidation in the nation's airtime sales market.
The broadcaster is considering its options after the government last week approved the merger of Carlton Communications and Granada, the two dominant shareholders in terrestrial network ITV [WAMN: 08-Oct-03]. The deal will create a company controlling over 50% of TV advertising airtime, fuelling speculation that commercial rivals will pool their sales operations in a bid to keep up [WAMN: 10-10-03].
C4 accounts for around 20% of airtime – worth an estimated £625 million ($1.04bn; €887m) annually – making it the second largest player behind the combined Carlton/Granada. It is expected to ask new communications regulator Ofcom to drop restrictions on further consolidation as it seeks to combine its sales operation with one of its smaller rivals.
There are two major broadcasters with which C4 might attempt a sales alliance: satellite operator BSkyB (which controls around 11% of the airtime market) and terrestrial station Five (about 8%).
It is unlikely regulators will allow all three to merge their sales units, but C4 is reportedly keen to do a deal with one of the other two, if only to prevent BSkyB and Five forming a sales alliance of their own.
• Separately, there are reports Scottish ITV licensee SMG (Scottish Media Group) may join forces with Walt Disney Company in a bid to buy out Carlton and Granada's respective stakes in breakfast station GMTV.
Each of these four media firms owns 25% of GMTV, which supplies breakfast television for the terrestrial ITV1 station and is one of the ITV network's most profitable businesses.
However, SMG fears Carlton and Granada will have too much power over the unit once they merge their stakes into a 50% holding. Consequently, it is calling on the two firms to offload their shares.
Disney is said to be interested in increasing its GMTV interest, and may team with SMG to lobby for a sale.
Data sourced from: mad.co.uk; additional content by WARC staff