Merge with caution

NTL-ITV pairing faces rival road blocks

NTL’s proposed merger with ITV may hit the rocks because of U.K. anti-competition regulations.

The somewhat Byzantine trail begins with NTL’s ownership of Flextech, which, in turn, owns half of pay TV outfit UKTV.

The BBC owns the other half of UKTV, which operates 10 channels, including UK Gold, a showcase for vintage BBC fare.

A merged NTL-ITV would own rights to a back catalog containing a portfolio of premium shows so vast that rivals might regard it as unfair competition.

One solution would be for the BBC to invoke its right to buy out UKTV, allowed in the event of a change of ownership.

There is also speculation about the implications of a merger of ITV and NTL’s ad sales arms.

A joint sales operation would control more than half of the U.K. TV ad sales market, a situation advertisers are likely to claim is intolerable.

Meanwhile, ITV is proposing closing its pension plan and raising the retirement age of many employees as it makes itself more attractive to potential suitors.

In separate news, ITV has lost a £10 million ($19 million) a year sponsorship deal, the most lucrative in British TV, with confectionary giant Cadbury’s for flagship soap “Coronation Street,” Blighty’s most popular TV show.

Cadbury’s, sponsor of the show for a decade, wants to spend the money elsewhere.

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