‘The UK Needs Some Media Free of US Control’: Comcast’s Takeover Attempt for ITV Concentrates Minds

The idea of Comcast acquiring ITV has prompted worries about the impact on the UK's public service broadcasting, a fact that Channel 4’s new chief executive, moving from a high-ranking position at Sky, will be all too well aware of.

Sky’s advertising chief, Priya Dogra, will now be expected to take a leading role to oppose her ex-company's takeover plan to protect Channel 4.

The proposed combination of Sky and ITV’s terrestrial and streaming assets would leave Channel 4 a relative commercial minnow in the realm of TV and digital ad sales, reviving debate of the need to reconsider some form of tie-up with the BBC for continued existence.

Foremost Worry: The Future of News

However, it is the possible consequences on the future of news provision that are causing the most urgent concern for many within the television industry.

The shock revelation last month that Comcast, which controls assets including Universal Studios and acquired Rupert Murdoch’s Sky for £30bn in 2018, is financially rational. Traditional broadcasters are facing a deep-seated viability crisis as audiences and revenues continue to swiftly shift to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s bid for ITV is causing unease among media watchers, with specific worry for news provision.”

However, the potential £1.6bn purchase of ITV’s television business and streaming service, which would end 70 years of independence, is full of regulatory, political, and competition issues.

Overnight, Comcast would control Sky News and ITV News—including its far-reaching regional news operation—and become the largest shareholder in ITN, which produces news for ITV, Channel 4, and Channel 5.

While Comcast’s 40% stake in ITN would not be a majority holding—other shareholders include the owner of the Daily Mail, Thomson Reuters, and Informa—it would still be heavily involved in the news output of most of the main commercial broadcasters.

“If a deal goes through, the fate of ITN is an pivotal one that will concentrate attention politically,” says one senior TV executive. “Effectively, they will be involved in the news output of all the biggest non-BBC channels.”

Investment Promises and Regulatory Scrutiny

Comcast promised to keep funding Sky News for a decade, increasing its funding annually in line with inflation, as part of its 2018 takeover of Sky. As that obligation draws closer to ending, concerns have been raised about whether the US company will continue to completely finance Sky News, which has an annual budget of £100m but is thought to operate at a deficit of as much as £80m.

It is believed that any deal to buy ITV would include pledges not to seek permission from media regulator Ofcom to change the conditions of its public service broadcast licence, which includes duties to national and regional news.

“There are certainly questions about diversity of voice,” says Stewart Puvis, a former ITN chief executive. “Theoretically, Comcast could, say, merge Sky and ITV News and use its position as a 40% shareholder in ITN to wield power... I would hope Comcast realise ways of solving these problems.”

An Endangered Model

British TV executives have previously cautioned about the risk posed to the UK’s system of public service broadcasters (PSBs) by large parts of the industry being taken over by US corporations.

Recently, Ofcom published a report warning that public service television, such as news provision and UK-focused content, risks becoming an “endangered species” as viewers migrate to US online platforms and streamers.

The watchdog also revealed data showing that YouTube had exceeded ITV to become the UK’s second most-watched media service, behind only the BBC, with it and Netflix now the two most popular first TV destinations among young people.

A Call for Collaboration

There are those who believe that a Sky takeover of ITV, against the landscape of the viewer shift to mostly US digital companies, signals the need for closer partnership between the UK’s biggest broadcasters.

“The UK must have its own part of mass media which isn’t US controlled,” says a second broadcasting executive. “It’s a vital strategic need. I think the government needs to work out how the boards of the PSBs have a new part to their remits that requires them to collaborate.”

Given that advertisers follow eyeballs, a combination of Sky and ITV could create a British TV and streaming giant, with the two companies’ sales houses controlling a dominant share of total ad spend on traditional TV and broadcasters’ streaming services.

Regulatory Hurdles

Any deal will necessitate an investigation by the UK competition watchdog. Sky is hoping the regulator will widen the scope of the ad market to include the impact of giants like YouTube and Facebook.

“I think it will get approved,” says Alex DeGroote, a media analyst. “Comcast will do everything it can to say it will maintain the PSB status quo... But you don’t buy to ultimately keep everything the same. ITV plus Sky would give them a hugely dominant position in the TV ad market.”

The Precarious Position of Channel 4 and the BBC

Channel 4, which relies on advertising for the vast majority of its income, now faces a weakened BBC as a potential partner and a formidable commercial threat from a combined Sky-ITV.

“We may at some point end up in that situation because of the deep cumulative cuts to the BBC’s funding and because Channel 4, too, has a structural funding problem,” says Patrick Barwise, an emeritus professor at London Business School. “Channel 4 has repeatedly outperformed forecasts, but that is just delaying the inevitable. It’s now beginning to reach its limits.”

The continuing debate highlights a broader question for British media: how to safeguard a domestic voice and a healthy public service ecosystem in an ever more globalised and digitally dominated landscape.