United/Carlton merger to face airtime sales hurdle

The IPA has given its verdict on TV ownership: no change. United and Carlton need a convincing argument to push their deal through, says Jim Marshall

In August, the Institute of Practitioners in Advertising (IPA) submitted its views on the rules governing television company ownership and limits on share of sales. It proposed no change.

At present, the rules restrict TV ownership to 15 per cent of viewing (including the BBC) and 25 per cent of advertising revenue.

The Office of Fair Trading has yet to announce the results of this statutory review, although it is rumoured that a ruling will be made in February.

So how does the news that Carlton and United News & Media are proposing to merge impact on these rules?

The combined company would fall within the 15 per cent ownership limit but would be way over the 25 per cent maximum for airtime sales, representing 36 per cent of total TV revenue.

The IPA has not formally responded to the proposals, but the burning question is whether the IPA should change its view on airtime sales about three months after its submission to the OFT.

And, if so, why?

There are good reasons why the industry would want to see this deal completed successfully. It needs strong ITV companies to invest in programming (both production and purchase), develop digital TV and compete on a wider European/worldwide stage.

That said, I suspect the likes of Walt Disney and Time Warner will not lose much sleep over the prospect of Carlton and United coming together.

More importantly, the new company would control about 60 per cent of ITV, and the best quality part of the market at that.

So are there good reasons why it would now be acceptable – even beneficial – to advertisers and agencies?

I am afraid that I am struggling on this point.

It is important we hear all the arguments from Carlton and United. These need to address not just the idea of a single Carlton/United sales operation but also an alternative plan to retain two separate entities under the same ownership.

This idea, which seems to offer an elegant short-term solution, still gives me a lot of discomfort, what with the prospect of coll usion and so forth.

So we need to do “nothing immediately”, except listen to the arguments.

The IPA made its decision some months ago and the organisation now needs to hear some strong and enduring arguments if things are to change.

Jim Marshall is chief executive of MediaVest UK and responsible for the future of TV at the IPA

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