Gerry Murphy, ceo of Carlton Communications, revealed over the weekend that competition concerns thwarted its merger discussions earlier this year with Granada Media.
Following advice from law firm Slaughter & May that a merger would be probably be blocked on competition grounds, talks were halted [WAMN: 27-Feb-02]. “We were not able to give ourselves any comfort on the competition issue,” said Murphy.
He cited the likelihood of opposition by competition regulators as one of the main reasons ITV’s controlling duo were unable to agree merger terms. “We never quite got the risk-reward balance right,” he confided.
However, the adspend slump and both groups’ current financial vulnerability have impelled the pair to the fullest possible cooperation short of merger. The duo accordingly plan to pool their respective back office functions, make joint presentations to major advertisers (although unable to combine ad salesforces for competition reasons) and integrate programme scheduling.
Both companies are poised to 'virtually' meld all operations not directly linked to advertising sales. “To the extent we can,” said Murphy, “we will put the marketing people together with the programme schedulers.”
Data sourced from: Financial Times; additional content by WARC staff