The Independent Television Commission approved yesterday a controversial share "parking" scheme proposed by television companies Granada and Carlton, but served a sharp warning that it would seek the power to overturn such arrangements in the future.
The two ITV companies had sought ITC approval to place a combined 32 per cent stake in Independent Television News into a special company, over which they would have no voting rights. The scheme was aimed at circumventing rules limiting stakes in ITN to 20 per cent, and was proposed when talks with potential buyers of the excess shares failed to lead to a deal in time for the deadline of 31 December.
"We have been trying to sell the shares since June," a spokesman for Carlton Communications, Michael Green's media company, said. "We see this as a temporary measure."
The excess shareholdings were the result of the takeovers by Granada and Carlton of LWT and Central respectively, which took the two acquiring companies from 18 per cent to 36 per cent of ITN. Several ITV companies - including Yorkshire-Tyne Tees, Anglia, Meridian and HTV - expressed an interest in buying the shares but balked at the asking price.
Privately, Granada and Carlton were upset at a campaign by some ITV companies to encourage a second news provider to be designated by the ITC. Under the rules, only recognised news providers can offer services to the Channel 3 companies. Currently, ITN supplies all ITV news, including its flagship News At 10, featuring Britain's most-watched news presenter, Trevor Macdonald. Many media analysts believe the campaign is aimed at reducing the cost of news provision at ITV and at snatching up ITN shares at a deep discount.
BSkyB, the satellite broadcaster owned 40 per cent by Rupert Murdoch's News Corporation, has said it would supply news for about pounds 30m a year, far less than the current ITN contract, which is worth pounds 55m a year.
The Carlton spokesman said "It is our intention to correct the situation quickly, adding that "we note the ITC's concern".
The ITC, however, remained dissatisfied with the result, and called on the Government to "address avoidance mechanisms of this kind" in the new Broadcasting Bill, due to be debated in the next session of Parliament.
The regulator also seeks greater discretion in defining the acceptability of ownership structures in a range of situations such as bids for TV licences. A variety of innovative, but perfectly legal, ownership structures were put in place by bidders for the recently awarded Channel 5 licence.Reuse content