New media ownership rules boost TV shares

Media stocks jumped yesterday as the Government outlined measures to deregulate ownership rules for the sector, clearing the way for a single ITV company.

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Media stocks jumped yesterday as the Government outlined measures to deregulate ownership rules for the sector, clearing the way for a single ITV company.

Publishing a consultation paper ahead of legislation on the issue, the Government said it would maintain specific rules for each sub-sector within media and continue to treat the industry as a special case in need of careful regulation.

However, the document, jointly published by the Department for Culture, Media and Sport and the Department for Trade and Industry, said that change was needed.

Tessa Jowell, Secretary of State for Culture, said: "It is important that the regulatory regime for the media industry should promote competition, and not impose unnecessary regulations. But the media remain unique because of its role informing public opinion." The consultation paper said the rule that prohibits single ownership of the two London ITV licences would go. The 15 per cent limit on terrestrial TV audience share will be also be removed.

The move would allow Carlton to merge with Granada to form a single dominant ITV company, a stronger operator to fight rival satellite broadcaster BSkyB. Carlton shares rose 5.25p to 236p while Granada added 4.75p to 145p. However, the Government said the ownership of ITV and Channel 5 must remain separate and that media companies outside Europe, such as Rupert Murdoch's News Corporation, would continue to be barred from owning British terrestrial broadcasters.

RTL, the European broadcaster that owns the majority of Channel 5, would have to sell this stake if, as rumoured, it wanted to acquire an ITV business.