Granada and Carlton Urge Cut in Fees after Merger Plea Fails
Shah, Saeed, The Independent (London, England)
THE GOVERNMENT rejected a plea yesterday by the Independent Television Commission on behalf of Carlton and Granada for emergency legislation to allow them to merge in the face of a collapse in advertising revenue.
As well as pursuing the case for an early merger of the two main ITV players, it is thought that the ITC, the industry regulator, and Carlton and Granada, will lobby for the pounds 300m a year paid in licences by the ITV companies to be reduced.
Sir Robin Biggam, the ITC's chairman, in a speech on Wednesday night, said the "massive turn down" in advertising meant that the commercial sector would no longer be able to compete with the BBC, which has a guaranteed income. He said that waiting for the Communications Bill to become law, which is expected to remove the bar on a single ITV company, could take until 2004, which will be "too late".
"As a regulator, our hands are tied. We are governed by the current legislation, which in key areas such as media ownership is hopelessly outdated at a time when flexibility is required to meet the market and technology changes," Sir Robin said at an ITC-hosted dinner in Edinburgh.
A merger of Carlton and Granada would give them 90 per cent of ITV and would provide cost-savings benefits.
James Heath, a spokesman for Granada, said: "We support Robin Biggam's call for serious consideration to be given to early reform of the media ownership rules. It is a significant intervention."
Whereas the BBC, under a generous financial settlement from 1999, is guaranteed an annual inflation-busting increase in its income from the licence fee, it is thought that ITV advertising sales are down 20 per cent this year. The regulator is concerned this will damage programming budgets.
"The ecology of public service broadcasting in the UK has been based on the ability of the commercial sector to keep the BBC on its toes with programmes of originality and quality. …