Doug Flynn, chief executive of the media buying group Aegis, yesterday criticised the "bizarre television market" in the UK, including the position of ITV, and added that there was now more free television in Russia than in this country. Mr Flynn's comments come just days before the Government announces its ruling on the proposed merger of the ITV companies Granada and Carlton.
Mr Flynn saw the merger as inevitable but doubted that it would make any significant difference to ITV's "monopolistic" practices. The uncertainty in ITV was a short-term hindrance to the company but any behavioural changes at ITV would be driven by ITV's monopoly position, he said.
Although there have been fears that the merger will further reduce competition in the advertising market, there is little competition between the two ITV franchises now anyway, said others sources at Aegis.
Many analysts expect the Government to order Carlton or Granada to sell one of their sales houses as part of any merger deal. But Mr Flynn sees this as "fiddling around the edges".
Mr Flynn's comments came as Aegis announced flat six-month profit figures and gave little indication of a significant improvement in its key European markets in the short term. Almost 85 per cent of group operating profit came from the company's European operations in the first half of 2003 and with the major European markets still sluggish and "the underlying picture changing very slowly" the company expects a "satisfactory" full-year result for 2003 and some improvement in 2004.
A drop in net new business in the media segment of more than 50 per cent from last year was driven by a drop in the number of pitches. Mr Flynn described the drop as "obscure to me" and could offer "no sensible reasons". Approximately two-thirds of the client losses resulted from consolidations and gains had not kept pace with a year ago.
Analysts were divided over the outlook for the company. One felt that restructuring undertaken by the group would help the company benefit from any improvement in Europe. Another analyst said the exposure to the tougher European markets would continue to make any recovery a long slow process.Reuse content