Carlton, Granada mull news merger

Streamlining biz part of integration strategy

LONDON — ITV’s largest shareholders Carlton and Granada are considering creating an ITV News division as part of their integration strategy, in preparation for the proposed £2.7 billion ($4.5 billion) merger.

The division would house the U.K. web’s regional news operations as well as ITV News Channel. It may also become home to ITN, if Carlton and Granada take full control of the national and international news provider. The pair is also considering creating two other divisions, one for broadcasting and another for production.

Streamlining of the business is expected to result in savings of $19.5 million on content creation and a further $19.5 million in so-called “back of house broadcasting and commissioning,” according to a report in Monday’s Financial Times.

The merger, if approved by antitrust watchdog the Competition Commission, is expected to create savings of $19.5 million once the corporate structures become one, while the formation of a single ad sales house would deliver $32.5 million.

Carlton and Granada have been trying to find ways to keep one airtime sales house as part of their merger, which is essential according to Carlton boss Michael Green. But the commission may want them to divest both.

Blighty’s advertisers fear that a consolidated ITV could control 50% of commercial TV viewing and 54% of national television ad coin, much higher than the 25%-30% ad share limit the regulator tends to enforce.

The regulator is attempting to establish whether the deal would reduce competition or lead to a price hike for some advertisers.

The Competition Commission is due to deliver its report to Patricia Hewitt, the trade and industry secretary, next month. If the merger is approved then Carlton and Granada will have two months to negotiate with regulator the Office of Fair Trading about how to implement any concessions recommended.

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