Media Viewpoint: Why we must end ITV's merger muddle: Nigel Walmsley opposes Clive Hollick's call on this page last week to extend the ban on TV takeover bids

CLIVE HOLLICK, chairman of Meridian Broadcasting, wrote in this column last week that the 1990 Broadcasting Act was deeply flawed, and forecast difficulties unless changes were made. Most ITV companies would agree. He concluded that it would be logical to freeze the current regulations for longer than the Government intended, and claimed that this would command 'widespread support' from ITV companies. It would not. If the present arrangements are not in the best interests of British television they should be changed, not extended.

The debate turns on two questions. Should European companies be prevented from taking over any or all of the 15 regional television companies that make up ITV; and should the nine 'large' ITV companies be allowed to merge with each other?

The present rules are a wonderful British muddle. The Independent Television Commission (ITC) can allow a friendly takeover of any ITV company by any British or European company. As good Europeans, the Government could not frame the Broadcasting Act in a way that treated British and European companies differently. But to prevent undue concentrations of media ownership, it cannot permit one of the large ITV companies, such as Carlton, Central, Granada or LWT, to merge with another large ITV company, such as Anglia, HTV, STV or Yorkshire.

However, from January 1994 the ITC will have less discretion in preventing unwelcome or hostile takeovers by European companies. Perversely, it will also continue to be prevented from allowing a friendly merger between two large ITV companies. In theory, therefore, a German steel-making company could buy Anglia Television by making an offer to its shareholders over the heads of the Anglia Board; but Carlton and Anglia could not merge even if their shareholders, boards and management desired it.

Unless the rules change, two large companies, say Central and HTV, could not merge because their combined revenues of pounds 450m and audience coverage of more than 12 million would be undue concentration; but Central and the Berlusconi empire, with combined revenues of pounds 1.8bn and audience coverage conservatively estimated at more than 60 million, could merge. Even stranger, under a different set of rules, Rupert Murdoch's interests can encompass five national newspapers and six satellite television channels in the UK without that being regarded as excessive concentration.

The Government does have the power to change the rules, and allow two large ITV companies to merge. It could make this change at the end of this year when the moratorium expires. This would give British broadcasters the chance to compete with others on a more equal footing, improve the likelihood of UK television remaining in UK hands, and help ITV remain competitive in a world of fast-changing technology. Above all, it would help British broadcasters to maintain their investment in home- grown television programmes.

What would happen if, as Clive Hollick suggests, we tried to keep the Europeans out for longer, while freezing the UK ownership restrictions?

There must be some doubt whether an extension of the moratorium would work. There is no guarantee that it would prevent a friendly takeover in which a European made an offer that an ITV company could not, in all good conscience, reject, and to which the ITC had no reasonable grounds to object. Second, the world will not stand still long enough to

allow a protected ITV to sort out all the unfinished business that Clive Hollick lists. Satellite and cable will bring more imported programmes and erode ITV's market share. Meanwhile ITV, which invests more in British programme-making than any other single channel, would still be carrying 15 sets of ownership overheads. Even the largest ITV companies would be dwarfed by European media groups.

We cannot decouple ourselves from Europe or from changing technology. We must give British commercial broadcasters a reasonable opportunity to compete with Europeans who have no inherent loyalty to domestic television programme production attuned to British viewing tastes and interests. This means allowing the larger ITV companies to merge or rationalise.

This proposal poses no threat to regional programming - one of the great strengths of the ITV system. The licences that the ITC issued in 1991 guarantee the continuing provision of 15 separate regional programme services, and give it teeth to protect them, irrespective of any changes in ownership.

The ending of the moratorium and lifting of the ownership restrictions in January 1994 would not solve all of ITV's problems at a stroke - but it would be a start. Several of the ITV companies, including Carlton, Central and LWT, have already called for changes in the ownership rules. The sooner this happens, the better.

The writer is Chief Executive of Carlton Television.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Ashdown Group: Web Developer - London - £40K plus benefits - Salary negotiable

£38000 - £40000 per annum + Excellent benefits: Ashdown Group: A leading consu...

Sheridan Maine: Accounts Assistant

£12 - £15 Hourly Rate: Sheridan Maine: Are you an experienced Accounts Assista...

Sheridan Maine: Accounts Payable Clerk

£21,000 - £24,000 Annual: Sheridan Maine: Are you looking for a new opportunit...

Sheridan Maine: Finance Manager

£55,000 - £65,000 Annual: Sheridan Maine: Are you a qualified accountant with ...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat