ITV fails to lose ad ‘straitjacket’

Contract Rights Renewal restrictions to remain

LONDON — ITV’s hopes of winning immediate regulatory concessions over how it sells its ad breaks have been dashed.

The Competition Commission has said the web must keep the system, known as Contract Rights Renewal, and added that ITV had “overstated the cost and distortions” of its impact on revenue.

But the broadcaster’s new CEO, Adam Crozier, attacked the ruling for being “out of touch and damaging for the interests of creative Britain.”

He said it was “unlikely” that ITV would seek a judicial review, but would redouble its lobbying efforts for a liberalization of regulation and “urgent modernization” of competition law.

CRR was introduced as a condition of the merger between Carlton and Granada that led to the creation of ITV as a single, listed U.K. company in 2004 to prevent the web abusing its dominant market position.

ITV has consistently argued that CRR is a “straitjacket” acting as a brake in what has until recently been a very challenging U.K. TV advertising market.

In the long term, ITV may well succeed in getting the rules relaxed.

The Competition Commission ruling said the mechanism should not be permanent and that the entire U.K. TV ad sales market should be reviewed.

Recently another local regulator, Ofcom, said CRR should be dropped.

The new, Conservative-dominated British government, which took over May 11, is likely to be more sympathetic to a deregulated TV advertising market than the old Labour administration.

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