Bosses of British broadcast groups Granada Media and Carlton Communications have reportedly accepted in private that plans to merge their sales houses are unlikely to gain government approval.
The two firms are leading shareholders in British commercial television network ITV. They plan to merge their respective companiesto create a unified network, but advertisers are worried that a combination of their ad sales units would restrict competition, especially in London.
Earlier this week, Britain’s two leading advertisers, Procter & Gamble and COI Communications (the administrative interface between the government and its marketing agencies), notified the Competition Commission of their concerns at the merger, echoing the opposition of ISBA (Incorporated Society of British Advertisers) and the Institute of Practitioners in Advertising.
Such disapproval has, according to a report in MediaGuardian.co.uk, prompted a change of heart at the two media firms.
Until now, Granada and Carlton bosses have been adamant that the deal would be scrapped if they could not merge sales houses. Now, however, senior executives are said to have accepted that the chances of gaining approval for the move are slim, and are putting together contingency plans to push through a revised deal by the end of the year.
Should a single advertising unit be forbidden, the two firms are reportedly planning to set up Carlton’s sales house as an independent firm. However, this could still meld with the ITV sales house should the network’s share of advertising fall below a certain, undisclosed level.
Data sourced from: MediaGuardian.co.uk; additional content by WARC staff