'Free-for-All' as Media Ownership Rules Are Relaxed

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Byline: GRAEME WILSON;TARA CONLAN

A MASSIVE shake-up of media ownership rules that could change the face of British broadcasting was unveiled by the Government yesterday.

It cleared the decks for Granada and Carlton to merge, paving the way for the eventual creation of one giant ITV company.

And it will allow U.S. giants such as Disney, AOL Time Warner and Viacom to gain a foothold in British television as the ban on non-European companies owning ITV companies is lifted.

The Government is also to relax restrictions on newspaper companies buying shares in terrestrial television stations. And Channel 5 can be taken over completely by a newspaper company.

It could mean a tycoon such as Rupert Murdoch ? whose News International company owns The Times, The Sun, The News of the World and The Sunday Times ? might be a bidder for the station.

He is already a major player in the television industry through his BSkyB satellite network, but is understood to have long been keen on gaining a stake in the terrestrial market.

The overhaul effectively means that the British television and radio market will become one of the most liberal in the world.

The world's biggest media groups ? such as Viacom, which owns the American TV network CBS and Paramount film studios, Disney, which owns the ABC TV network and AOL Time Warner ? are expected to bid to take over a whole swathe of British firms.

Announcing the proposals in the Commons, Culture Secretary Tessa Jowell said she wants to end the current anomaly that allows Silvio Berlusconi, the Italian prime minister and media magnate, to buy into ITV but prevents U.S.

companies from doing the same.

Matthew Horsman, media analyst at Investec Securities, said: 'It's a free-for-all.

What is interesting is that the Government clearly thinks that plurality of ownership is not a domestic affair.

'This goes well beyond what anyone was expecting.

There is huge commercial logic to this, but it is surprising it has come from a Labour government.' Industry experts have described the moves as 'hanging a For Sale sign' in front of ITV, Britain's biggest TV network.

Under the proposals, rules which currently prevent a single owner of the independent network are to be scrapped.

And national newspaper groups will be able to invest in ITV and radio firms, but will be barred from owning more than a fifth of ITV.

However, they would be able to buy Channel 5 outright.

Broadcasting minister Kim Howells said the changes would allow Channel 5 to seek increased investment.

Channel 5 ? two-thirds owned by Luxembourgbased RTL and one-third by United Business Media ? said it did not wish to comment on the proposals.

A number of radio stations could also merge as rules that prevent companies owning more than one national licence are dropped.

Unveiling the draft Communications Bill to MPs, Mrs Jowell said: 'New laws are needed to replace outdated and clumsy regulations. …