ITV welcomes regulators' review of advertising regime
ITV received its second bit of relief courtesy of the Government this week after regulators launched a review into the rules governing its advertising regime.
The Office of Fair Trading and the Competition Commission have begun a review of the Contract Rights Renewal (CRR) system, put in place in 2003 when Carlton and Granada merged to create the company. Under the rules, the broadcaster must compensate advertisers if viewership of ITV1 falls. The CRR was designed to protect advertisers from the dominant position that ITV gained through the merger.
The system is a bugbear of ITV boss Michael Grade, who has argued that it constrains creativity and innovation and has hindered his efforts to turn around the struggling broadcaster.
The regulators expect the review to last a year, and will take evidence from all interested parties. ITV said it would submit a summary of its views this week.
The company's shares did not react to the news, which had been previously flagged up by the Government. In a statement yesterday, the OFT said that it "is required to consider from time to time whether merger undertakings such as CRR should be varied, revoked or superseded in the light of any changes of circumstances. It will be necessary to revisit the CC's 2003 report and take account of relevant market changes and industry developments in relation to the matters that these sections of the undertakings are intended to address."
Since the merger, ITV's share of the national advertising market has fallen from just over half to about 40 per cent, though its digital channels have helped it to recoup some of the lost ground. The OFT may publish "emerging thinking" documents as the process progresses.
The move by the regulators came a day after John Hutton, Secretary of State for Business, Enterprise and Regulatory Reform, upheld a Competition Commission ruling to force Sky to reduce its 17.9 per cent stake in the broadcaster to less than 7.5 per cent because it was deemed anti-competitive. The blocking stake had dampened investor interest in the stock, which has lost about a third of its value in the past year.
Analysts expect Sky to appeal against the decision, which could drag the process out for another year, though few expect it to be successful. The pay-TV company booked a major loss related to the holding. A forced disposal, most likely via a steady drip-feed into the market, could further depress the stock's value.
- 1 Boston Marathon runner's search for mystery man she kissed ends with letter from his wife
- 3 Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
- 4 How to gain confidence and maximise your sexual potential
- 5 Chinese theme park sets up 'death simulator' where volunteers can experience being cremated
Saudi Arabia's King Salman sacks senior aide for 'slapping' a journalist behind him live on TV
Boston Marathon runner's search for mystery man she kissed ends with letter from his wife
Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
Italian police 'reveal' what Jesus looked like as a young boy
Florida couple forced to register as sex offenders for having sex on public beach
In defence of liberal democracy
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
General Election 2015: Post-election 'shambles' looms as 70 per cent of voters say SNP 'should not be able to veto UK government policies'
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...