The relative calm of Britain’s ITV commercial network will be shattered soon by a frenzy of merger and takeover bids if, as expected, the government announces a relaxation of the web’s cross-ownership restrictions this week.
The major regional ITV stations have been preparing their war plans intensively for months, waiting for the moment when the government tells them they can begin buying each other.
“We’re standing by our beds with our helmets on,” said one ITV exec. When the smoke of battle clears, the country’s top-rated TV network will likely be dominated by two or three major media groups, ready to compete far more aggressively at home and in the international arena.
ITV biggies Granada and Carlton are looming as the most powerful predators, while middle-sized players Yorkshire Tyne Tees TV and Anglia TV look the most vulnerable to attack. Two of the richest stations, Central TV and London Weekend TV, are likely to fall into the category of both predator and prey.
But there could also be a role for international media groups to play the white knight by entering partnerships with threatened ITV companies, bolstering their defenses and providing them with attacking firepower.
It now seems certain that some kind of rule change is imminent — but the problem is, no one knows exactly what kind. ITV execs were anticipating a statement from the Dept. of National Heritage Nov. 19, but when that failed to materialize the betting shifted to today.
This follows months of lobbying by the biggest ITV stations, arguing that the web of regional stations cannot survive in the ruthless new world of multichannel television if it remains fragmented into 15 separate companies — especially since the l991 ITV license auction created vast disparities of wealth among them.
At the moment, the nine ITV stations defined as “large” are not allowed to own more than a 20% stake in each other, though they are allowed to own one of the six ITV stations defined as “small.” Under the likely rule changes, two large stations will be permitted to merge while still being able to own another small station.
But nothing is ever quite that simple in the ITV web, one of the world’s most convoluted commercial TV systems, and the new rules could be hedged around with provisos and exceptions.
For example, rather than simply letting one large ITV station take over another, the government may set a cap on the share of national advertising revenues a company can control. If the limit were 25% of ITV revenues, that would immediately rule out some bigger mergers.
The permutations are mind-boggling, especially with many of the 14 stations already linked by a complex web of cross-shareholding.