Concerns grow over ntl/ITV merger talks

Ntl's attempts to seek a merger with ITV have got many advertisers and agencies up in arms over the combined power the merged entity would have within the advertising marketplace.

The concerns centre on the combined power of the two companies' assets.

The joining together of ntl's complete TV inventory and ITV's family of channels would hand the combined broadcaster the biggest share of audience and ad revenues in the commercial TV market.

The combined broadcaster would account for around 52 per cent or £1.72 billion worth of all TV advertising revenues (based on 2006 figures). Audience share would stand at 44.6 per cent, which is based on figures from January to October.

There are several routes the merged company could take to allay such fears. Splitting terrestrial and digital airtime sales would be one way. Updating the CRR trading mechanism is another. And ntl could argue a successful merger with ITV could create a stronger challenger to BSkyB, spanning free and pay-television, programming content, broadband services and fixed- line and mobile telephony.

But if ntl does bid for ITV, Ofcom would certainly launch a change of control review into the licensing arrangements and the competition and economic aspect of the deal. Privately, Ofcom thinks it extremely unlikely that the Government will launch a public interest test - the third and final obstacle to a merger - since it has not invoked its right to do so for three years.

Comment, page 36

NTL/ITV - THE INDUSTRY'S VIEW

OLIVER CLEAVER - European media director, Kimberly-Clark

"ITV needs strong parentage to get an upswing in 2007. It looks like it can't produce the turnaround it needs on its own. The idea of IDS selling alongside ITV doesn't worry me, only a third of our spend is with ITV and ntl. TV sales people are competitive, even in a single organisation."

CHRIS HAYWARD - head of investment, ZenithOptimedia

"ITV still has much to offer the market. ITV is attractive from ntl's point of view, since it gives them access to some great programming. My fear is that if ITV was to be the subject of a bid, a bidder would go in with thoughts of asset-stripping. That wouldn't be healthy for the UK TV market."

GEOFFREY RUSSELL - secretary and director for media affairs, IPA

"Why would we welcome a merger that represented more than 50 per cent of the airtime market? You can be sure some kind of control, similar to CRR, would result from a merger. Advertisers and agencies would seek protection from the dominant player in the market."

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