Carlton and United need strong brand for cross-media synergy

Carlton and United may not achieve a tight enough fit to replicate the BBC’s successful cross-media promotion, says Torin Douglas

Which will come first: a single ITV, a single cable industry or a single television regulator?

The mooted &£8bn tie-up between Carlton and United News & Media – assuming it goes ahead relatively unchecked, which is a big “if”, given the weekend sabre-rattling by Granada – means ITV will soon have more regulators than major component companies. The Independent Television Commission, Oftel, the Office of Fair Trading and the Broadcasting Standards Commission will outnumber Carlton/United, Granada and the Scottish Media Group.

Meanwhile NTL and Cable & Wireless must cool their heels while the Competition Commission determines whether their cable industry merger – involving far fewer eyeballs and a slightly smaller share of advertising revenue than the proposed ITV deal – is a good thing. And that’s before NTL can even think of dropping a friendly note to Telewest in the hope of uniting the cable industry further.

While the cable merger is stymied at the behest of the trade secretary Stephen Byers, the Carlton/United deal would seem to drive a coach-and-pair – or at least a pony-and-trap – through the current media ownership limits. Though the catalyst for the move was culture secretary Chris Smith’s announcement that a relaxation of the rules was in the pipeline, it is not clear that the Carlton/United tie-up will meet the new conditions.

It was not that long ago that no group was allowed to own more than one ITV company, let alone six (not to mention a third of Channel 5 and half of ONdigital). In those days, the idea that any company could control an ITV station and a national newspaper group (even one as weak as the Express titles) was anathema.

Times may have changed, but this ITV merger is stretching the boundaries – though Carlton and United deny they’re trying to push the regulators and the Government into moving more quickly and a bit further than they had intended. At present, no company is allowed to control more than 15 per cent of the national television audience. Carlton/United say they have 14.9 per cent, though if the ITV Network Centre executives hit their Christmas bonus targets with thrice-nightly editions of Who Wants To Be a Millionaire, that threshold is in danger of being breached. That’s not counting United’s 30 per cent stake in Channel 5, which rivals claim should be included.

As for the 25 per cent limit on share of national advertising revenue, it is widely accepted that the two companies already have 36 per cent, even before they start trying to leverage their new sales muscle. Advertisers and agencies are unlikely to accept that without a protest – though they may be unwilling to do so publicly for fear of reprisal (itself a sign of the dominance they dislike).

So will the deal be approved? It would be a hard decision for any regulator at the best of times, even without two separate Government departments, the DTI and Culture Media & Sport, planning to move the goalposts. When the referees are in competition with each other, wielding different flags and whistles, the decision becomes even more complex.

As the various TV regulators jockey for position in the race to become the overall communications industry supremo, which one is going to wave the deal through? In terms of a corporate career move, is it better to act tough or flexible? Will the ITC vote one way and Oftel and the OFT another?

The Carlton/United deal raises more questions than it answers. Not the least of these is where the Daily Star’s Megastar Website fits into the megamerger if, as we are told, the deal is as much about building a strong “new media” presence in the digital arena as it is about conventional television and newspapers.

For the synergy between the different media – once seen as the great attraction of welding TV, newspapers and radio into a multimedia conglomerate – has not been widely apparent in Lord Hollick’s United.

For some, that has had its plus side. The fact that the Daily Express recently joined the campaign to bring back News at Ten showed it had not yet been reduced to the status of an ITV cheerleader (in the way that most Murdoch titles proudly beat the drum for BSkyB). But some observers are already questioning whether such insubordination would be tolerated under the chairmanship of Michael Green. And the reported suggestion that – to sweeten the Carlton/United deal for the Government – News at Ten might be brought back for the period of the next election campaign shows just what murky waters these are.

Yet it is by no means clear what media benefit – as distinct from financial benefit – is derived from putting cross-media companies together. Mathew Horsman of Investec Henderson Crosthwaite has pointed out one – the way the BBC uses its various channels to promote each other and its new media activities. But the forces of Carlton and United would have to merge far more seamlessly than seems probable, if they are to realise a similar synergy.

Unless you had been told, you might never have realised that the Express titles and the Star were part of the same group as Anglia Television, Meridian and HTV – not least because Lord Hollick has never found a corporate brand name that lasts long enough to knit them all together. The various names used so far – MAI Broadcasting, Meridian Broadcasting and United Broadcasting/Production/Film & Television – have never had much resonance. And just at the moment when Carlton has finally wiped out the names, if not the memories, of Central Television and Westcountry, it too may be facing a corporate name change.

Until it can brand itself more strongly, the idea of the new company as a global media enterprise seems a little far-fetched.

Torin Douglas is media correspondent for BBC News

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