You will be redirected back to your article in seconds

U.K. merger redraws map

Venture to nab 15% of Brit auds

LONDON — The newly disclosed $12.5 billion mega-merger of Carlton Communications and United News & Media will be a tight squeeze, insofar as government constraints are concerned.

The new company, combining free and pay TV, will nab almost a 15% share of the national audience and 36% of national TV ad revenues — just under the regulatory limit for audience share, but well over the ad limit.

No one knows whether the merger will go through, but meanwhile, media minds in Britain are still spinning with the news.

The deal, which redraws the map of British broadcasting, would create the U.K.’s largest private TV group, worth £7.8 billion ($12.5 billion). Pact brings together two of the U.K.’s most formidable media entrepreneurs: Carlton’s Michael Green and UNM’s Clive Hollick.

Green will be chairman of the merged group, Hollick chief exec.

The merged giant will own six regional ITV stations covering 65% of the network, as well as 50% of digital broadcaster ONdigital and 29% of Channel 5.

Carlton also owns Technicolor and Quantel, while United brings the Express newspapers, Miller Freeman tradeshows and the NOP market research agency. Both companies have growing Internet operations, and Carlton has amassed a large film library.

But Technicolor, Carlton’s U.S.-based film processing and video duplication subsid, is one of several assets that have been earmarked for sale once the merger is completed.

The combined annual sales of Carlton and UNM total $10.44 billion. The proposed stock swap will give Carlton 52% of the merged company.

“Bringing free and pay television, program-making and the Internet together in one company creates huge potential,” declared Hollick. “It will have the management, the resources and the financial firepower to succeed in the global media marketplace.”

The deal is subject to approval by the Independent Television Commission and the Office of Fair Trading.

Currently reviewing this ownership limit, the OFT is widely expected to relax the rule in a couple of months. Nonetheless, the merged company may still have to offload one of its smaller ITV stations.

Ownership rules relaxed

The U.K.’s TV ownership rules have been progressively relaxed over the past few years to permit the emergence of larger British media groups capable of competing in the international market.

The Carlton/United merger represents a challenge to the other major player in the ITV network, Granada, which owns the other 50% of ONdigital. Granada execs have made no secret of their belief that ITV will eventually merge into a single company.

The London Stock Market greeted the Carlton/United deal with enthusiasm, driving up the shares of the two companies. Both have suffered recently from investor skepticism about their long-term growth strategies.

Strange bedfellows

In the past Green and Hollick were seen as deadly rivals from opposite ends of the political spectrum. Green was a close ally of former Conservative leader Margaret Thatcher, while Hollick is a Labor peer and senior adviser to Tony Blair.

Pragmatic concerns have driven them together, but it remains to be seen how two such strong-willed characters, who share a reputation for ruthless leadership, will work together.

Meanwhile, there will be some fierce jockeying for position further down the merged group. Carlton’s Nigel Walmsley has been named head of the TV division, but Carlton’s recently appointed chief exec Steve Cain has been pushed out of the new company.

More Biz

  • Leaving Neverland HBO

    'Leaving Neverland' Lawsuit Proves to Be a Judicial Hot Potato

    The Michael Jackson estate sued HBO last month for airing the documentary “Leaving Neverland,” which accuses the late King of Pop of serial child sexual abuse. Since then, the case has had a difficult time finding a judge to handle it. Three federal judges have recused themselves in the last week, citing potential financial conflicts [...]

  • Blair Rich Marketing Summit

    Studio Marketing Chiefs Discuss the Theatrical vs. Netflix Oscars Debate

    On a day where a large part of the Fox marketing department was wiped out in the aftermath of the Disney merger, a group of marketing chiefs from other studios and streamers sat down at the Variety Entertainment Marketing Summit to discuss the issues shaping the feature marketing landscape today, including the theatrical distribution vs. Netflix [...]

  • Members of the public mourn at

    Guy Oseary’s New Zealand Fundraiser Nears $150,000, Continues Raising Money

    In the wake of the horrific shootings at New Zealand mosques last week that killed some 49 people, Maverick chief Guy Oseary launched a GoFundMe campaign to “support those affected by this tragedy at this very difficult time,” and began it with an $18,000 donation. Boosted by donations from many celebrities — including Amy Schumer, [...]

  • Cesar Sayoc Headshot

    Florida Man Pleads Guilty in CNN Pipe Bomb Case

    A Florida man pleaded guilty Thursday to sending pipe bombs to CNN and prominent critics of President Donald Trump. Cesar Sayoc appeared in federal court in New York, where he pleaded to 65 counts stemming from the mailing of 16 devices. He faces life in prison, plus 120 months, at his sentencing on Sept. 12. [...]

  • Gabrielle Union Marketing Summit

    Gabrielle Union on Building a Brand as a ‘40-Year-Old Black Woman From Nebraska’

    When New York & Company approached Gabrielle Union to be their new brand ambassador and the face of her own clothing line, the actress reacted with “disbelief.” “We are not supposed to be getting those offers, I’m not supposed to be having a career resurgence, my value isn’t supposed to be this high,” Union explained [...]

  • Tencent Profits Hit $1 Billion Per

    Tencent Profits Hit $1 Billion per Month as Company Loses Fizz

    Growing regulatory encroachments into its games business, a smaller than expected spin-off for its music division, and a fourth quarter profits drop, pointed to a troubling year for Chinese tech giant Tencent. Its financial results for the full 2018 period, while delivering profits of nearly $1 billion a month, appeared to bear out that thesis. [...]

  • splice

    Splice Raises $57.5 Million in Latest Funding Round

    Splice, a favorite of music creators that allows access to a library of three million rights-cleared sounds, announced today that the company closed a Series C funding round at $57.5 million. That brings Splice’s total amount raised to roughly $102 million since its launch in 2013. It raised a Series B in November of 2017. [...]

More From Our Brands

Access exclusive content