Magazine article Marketing
OPINION: Double Divestment Drops Down Agenda as Decision Day Looms
The conventional wisdom was clear. There was only one way that the Carlton-Granada merger would be allowed - and that was double divestment of sales houses. Some who really should have known better were convinced the merger would simply be turned down.
This would have been bad for Michael Green of Carlton and Charles Allen of Granada. David Elstein, when he'd finished with trying to undermine the BBC's finances, might even have got a chance to put his managerial plotting to the test and parachute a team in.
What is now clear is that there are different levels of competition other than the market for ad sales and that TV is not seen in the same light as concentration of supermarket ownership. The not-so-hidden agenda is that the government really does want to inject some life into ITV.
What we now know is that the Competition Commission wanted to approve the merger if it possibly could, as long as advertisers could be reasonably protected from ITV abusing a dominant position.
We are now in for a few tense weeks of negotiating 'behavioural' remedies with the Office of Fair Trading - with double divestment probably kept as a big stick in reserve should the negotiations fail. This is unlikely. Green and Allen have too much to lose.
Advertisers will not get exactly what they want, but there should be a consolation prize in the form of a better performing ITV. Executives say they have often been spending as much as 50% of their time on consolidation and structure rather than concentrating on building a stronger schedule. …