Magazine article Marketing

OPINION: ITV Has Still to Allay Fears over Sales House Bullying Potential

Magazine article Marketing

OPINION: ITV Has Still to Allay Fears over Sales House Bullying Potential

Article excerpt

The outcome of the long-expected Competition Commission inquiry into the Carlton-Granada merger is going to be difficult to call.

A rejection will greatly offend the two ITV companies, as it is difficult to see an alternative strategy at the moment that would appease long-suffering shareholders.

The advertising camp, in the form of the Incorporated Society of British Advertisers (ISBA), has some difficult arguments to make. ISBA has opposed every consolidation of the ITV system. Yet there is no mistaking the strength of feeling of major advertisers that want two not necessarily incompatible things - a strong ITV and vigorous competition for advertising sales.

Granada, too, will have some fast foot-shuffling to do. The company's comprehensive defeat of the Carlton-United merger just over three years ago, on the grounds that the merged company would dominate television advertising sales, will not go away.

What we are likely to get is a battle of academic economists. ISBA will come up with economists to show competition in ad sales will be seriously impaired by the merger. Carlton and Granada will produce equally respectable economists to prove TV sales and station average price constitutes an open market that clears itself every day and can't be rigged.

The commission will have a number of other issues to take into account. The law of unintended consequences will come into play. If the merger is nodded through without conditions, there is little doubt that a new sales house will rapidly be born. …

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