Media: Behind the hype - Evidence of conditional selling remains anecdotal

Ofcom needs more to go on and who wants to be called a tattletale?

We learned something else about David Connolly, the Ofcom adjudicator, last week: he's an optimist.

In his first quarterly report into ITV's compliance of its merger preconditions, Connolly disclosed that he had uncovered anecdotal evidence of the illegal practice of conditional selling at ITV.

Furthermore, he challenged agencies to report any incidents where they had been strong-armed into buying airtime on any of the ITV portfolio of channels for fear of being penalised on their deals on ITV1. Any official complaint would enable him to investigate formally.

But, despite his optimism, there is little hope of this happening. For a whole variety of reasons, the chances of any agencies choosing to blow the gaffe are pretty thin.

While conditional selling was undoubtedly a practice of the pre-merged ITV sales houses, the official line is that, because of the threat from Ofcom, they couldn't do it now even if they wanted to.

Simon Lent, the London sales leader at ITV Sales, reiterates that there is no obligation for agencies to buy ITV2 - if they don't want it, then they don't have to have it.

"We can't do it (conditional sell). David is there to see fair dealing is taking place. Any agency is within its rights to see Connolly if they're not happy with the way they are treated," Lent says.

Furthermore, he thinks that there is an element of mischief- making from some agencies that are intent on winding things up ahead of negotiations.

But then he would say that, wouldn't he?

With ITV facing the prospect of a substantial hole in its revenue next year because its Contract Rights Renewal position currently looks so bad, you can bet it will be selling its portfolio of channels more aggressively than ever.

And, since the ITV2 and Granada Sky Broadcasting sales teams were disbanded and negotiations rolled into the main ITV sales team following the merger, it is easy to see the temptation to link share of revenue for these channels to that of ITV1.

Because open discussion of all things to do with the adjudicator is off-limit for agencies, agency broadcast directors were reluctant to speak on the record.

However, it emerged that there are numerous reasons why they would want to keep their deal arrangements away from Connolly's inspection.

First, there is concern that they may look weak if they are seen as "running to teacher" - you can guarantee that rival agencies would seize on any perceived position of weakness at an agency and be all over that agency's clients.

There is also the argument that agencies are complicit with the practice - that they are quite willing to buy airtime conditionally. Agencies have been known to use conditional buying as a negotiation position - agencies are trying to sweeten their clients' deals with ITV in a kind of "you scratch my back and I'll scratch yours" way.

For example, by promising additional revenue to ITV1's multichannel siblings, the agencies hope to get some flexibility in their main ITV1 deals. This could be in the form of access to programming or ITV waiving penalties for late approvals or changes in the time-length of spots.

Connolly will also face the problem of proving wrongdoing. ITV has on its books a head of CRR compliance to ensure that it is not seen to break any of the regulations that were put in place as a condition of its sales merger - and you can guarantee that its deals are carefully worded.

At least for the time being, the threat of a referral is enough to keep ITV on its best behaviour in negotiations.

Despite his attempt to drum up trade, it would seem then that Connolly's phone is set to continue to be as quiet as it has been for the first three months of the year.

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