ITV gets green light to raise its stake in GMTV

ITV plc has been given approval to take a majority stake in GMTV, despite protests from the advertising industry.

The IPA led industry calls for the Office of Fair Trading to refer ITV's acquisition of Scottish Media Group's 25 per cent stake in the breakfast broadcaster to the Competition Commission.

However, ITV has been given the green light to buy SMG's stake for £31 million without any further investigation. This will give ITV a 75 per cent holding in GMTV, with Disney holding the remaining stock.

The IPA objected on the grounds that ITV could attempt to merge the GMTV sales operation into its own, which could allow ITV to increase the price of its airtime.

Despite only taking about a 2 per cent share of net advertising revenue, GMTV is a cost-effective way for agencies and advertisers to reduce their reliance on ITV's more expensive airtime.

Jim Marshall, the chairman of the IPA media futures group, said: "We are concerned about the implications of ITV merging GMTV's sales into its own operation. If this happened, then GMTV airtime could be traded as part of a conditional sell."

Nick Theakstone, the managing director of Group M Trading, was disappointed the matter was not referred to the Competition Commission. "I was surprised there was not a ruling on it - we hoped that GMTV would retain a separate sales team," he said.

However, sources at ITV played down the significance of the OFT's ruling.

One senior ITV manager said that although the OFT decision meant the company was now able to buy GMTV, the purchase was far from complete and the matter would still be referred to Ofcom.

It has been speculated that ITV may continue to run the two sales teams separately because of the specialist nature of the breakfast market.

Mick Desmond, the chief executive of ITV broadcasting, said: "Nothing is going to change this side of Christmas. A decision will be made on the structure of GMTV at a board meeting later this week."

The ruling coincides with ITV raising £172 million from the sale of its biggest non-core asset, its stake in the French technology group Thomson.

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