The Future Of ITV - 3 Become 2
Written: 14th July 2000
Bastille Day for France, and decision day for ITV. today it
was announced that Carlton Communications were given consent to merge with United
News & Media, a decision that shapes the future of ITV even more than was thought
possible 10 years ago.
Today's ruling by Trade Secretary Stephen Byers shows how ITV needs to "get it's
act together" to compete on the world stage against super-giant organisations such
as the Time Warner, News International and European giant RTL. The go-ahead
by Stephen Byers was to allow Carlton & UN&M to merge, however this doesn't necessarily
mean that it is over for Granada Media Group. Stephen Byers announced that
Granada were also allowed to submit a challenge to either Carlton or UN&M to merge
with either two of those organisations.
Certain conditions have been attached however in order to keep the
companies within the new audience share restrictions. If Carlton & UN&M were
to merge, then Meridian Television (UN&M) would have to be sold off by Carlton.
Granada would be most likely to purchase this. However, if Granada were to
acquire either Carlton or UN&M, then Granada would have to release one of its own
acquisitions for sale (Border Television is not included in GMG's acquisitions as
it is still owned by its original mergee). This is to be HTV, which has been subsequently
purchased by Carlton.
The share markets are currently predicting what they feel of the
report, showing that shareholders feel that Granada are getting the best out of
today's report. Carlton's shares fell 6.78 percent, UN&M shares fell 1.45
percent and GMG's shares rose 5.21 percent. The final decisions of the potential
mergers lies with the shareholders of the three companies, and now it seem inevitable
that ITV will become at least two major powers. Next up will be a revisal
of the Communications Bill, where it is expected that the Government will drop the
15% audience threshold, therefore giving way to a single ITV company.
It had also emerged that European television giant RTL are in the
running for a possible bid for United News & Media. The news came through
evaluation of the report. It is believed that RTL would like to enter the
UK market substantially, through the overall control of Channel 5. RTL currently
own 65% of Channel 5, the other 35% by United News & Media. If RTL were to
take over the whole of Channel 5, they would have to own HTV, Anglia and Meridian
initially. There are also chances from this that RTL would sell its least
profitable companies (HTV & Anglia) to open bidders (Carlton & GMG). Industry
sources have been quoted as saying that RTL are "readying" themselves to make an
offer to United News & Media. Industry advisors also predict that TF1 and
Italy's Mediaset as also being potential entrants to the UK market.
This adds pressure to an increasing debate on who will finally get ITV as a whole.
Carlton and UN&M today announced their plans following the approval
by Stephen Byers, they say no. In a joint statement, it emerged that Carlton
and UN&M were worried about the effect of losing Meridian would have to its business
plans. Therefore, Carlton cannot merge with UN&M with this "reduction to the
benefits of shareholders". This, according to reports now leaves the entire
title race open to Granada Media Group, who are yet to submit their options.
They look set to merge with one group, and then take over the third, making ITV
in England & Wales owned by one company. UN&M have alleged to "put themselves up
for sale" through the desperate jump into a joint-ownership in an increasingly competitive
market. Therefore, the top European broadcasters, namely TF1 and RTL are looking
more set than ever to merge with UN&M.
My personal opinion of the matter is that it is about time that
the companies of ITV got its act together, without government restrictions, to continue
running and broadcasting the best television in the world. What I would like
to see (and I think many people will agree with me) is that Granada should bid for
the takeover of Carlton. Granada brought back the "Tyne Tees" tag,
so why can't our saviors bring back "Westcountry" and more importantly "Carlton"!
However if Granada were to bid and win Carlton, Granada would HAVE TO release LWT
on a government restriction. LWT would then effectively be taken by United
News & Media.
On the other hand, the more logical outcome of this report would
be that Carlton & UN&M would merge, leaving Meridian for Granada. This then
creates main "competition" between Carlton & Granada for the overall single ITV.
Whatever happens from this date, it will be more competitive with
each stage that ITV goes along to complete its task as being a single company.
And whatever happens, presentation and regional branding will be a thing of the
It has finally happened, Granada has take the lead, and bought-out
United News & Media's ITV operations in a package deal worth £1.75billion.
This package also includes United's television production and International distribution
businesses. UN&M however do keep their 35% share of Channel 5 as it wasn't
part of the sale.
With restrictions set in by the Government, Granada now have to
sell one of their 7 ITV franchises, this is reported by Granada to be HTV's dual
region. The value of this sale is likely to be worth about £350million. It
is also though that Granada will also sell the 5% stake in GMTV as well. Both
of these assets are most likely to be captured by Carlton.
FURTHER Update - 24th October 2000
The third stage of the single ITV saga has now been completed, seeing
Carlton purchase HTV from Granada. In addition to the £170million price tag,
Carlton offered their 20% stake in Meridian to Granada. This has now been
completed leaving three main companies left in ITV, Carlton, Granada and SMG, with
Channel and Ulster being "independent".
10 years ago saw the first light of the franchise rounds which lead
us to this current state of ownership and takeovers, a distant vision of the future
when ITV started back in 1955. Nowadays, it seems the norm for one television
company to take over another, until one day, there will only one type of television,
lets just hope it isn't too dominant.
People say "regionalism in ITV is dead". Looking at what has
been happening over the past 5 years that seems true. The one thing that ITV
had over its main competition was its "regional character", and now that seems as
distance as the word "independent" in ITV.
What for the future from this? With more potential corporate
takeovers and more "joining forces" to create one single ITV, where will regionalism
come back into ITV? No-one knows the answer just yet, but I feel that ITV
was once independent, was once regional, and was once great.
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