LONDON — In a last ditch attempt to save the proposed £2.7 billion ($4.5 billion) merger of Blighty’s commercial web ITV, its two biggest shareholders Carlton and Granada this week put forward a solution to the Competition Commission regarding its airtime sales houses.
The Commission warned last month that the pair could be forced to sell off both airtime sales houses before their merger is approved. Carlton and Granada have made it clear they are only prepared to divest one of its sales houses.
Blighty’s advertisers are worried that a consolidated ITV could end up controlling 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.
In its latest proposal, Carlton and Granada have suggested that ad rates be linked more clearly with ITV’s viewing figures. Currently, the broadcaster uses a complex method known as “station average price” to calculate each ITV region. The average price for an ad slot is determined by dividing total ad coin by the number of people viewing ad spots. Critics are concerned that this system could be manipulated by a single ITV.
The regulator is attempting to establish whether the deal would reduce competition or lead to a significant price hike for some advertisers.
The Commission, which has not yet ruled out banning the merger entirely, is expected to hand its report to trade and industry secretary Patricia Hewitt on June 25; she’ll have four weeks to make her final decision.