Agencies snub plan to auction off ITV airtime

Agencies have dismissed the Competition Commission's latest proposal that ITV should auction off a proportion of its airtime as a possible remedy to a full merger.

Among the criticisms levelled at the hypothetical remedy, which is thought to have been created by the Competition Commission itself, are that it lacks insight, could be open to abuse and is so complicated that it is unworkable.

Although the Competition Commission has given the IPA until this Friday to digest the proposal, things do not look good.

"Getting rid of 20 to 25 per cent of its airtime is not much of a divestment," the chairman of the IPA media futures group, Jim Marshall, said. "It also throws up a massive number of questions, not least the legality and efficacy of such an arrangement."

The Competition Commission's suggestion is that ITV auctions a proportion of its airtime, separately from the annual trading round, to a third party.

This could then be retraded between advertisers or media buyers, theoretically reducing their dependence on the merged company for spot advertising.

The Competition Commission suggested that by selling some of its inventory, a benchmark price would be set that could be used for negotiations for the rest of ITV's airtime.

"Even after divesting 25 per cent of its inventory, ITV will still have control of 40 per cent of the TV market. This idea looks like it was conjured up by an academic with no idea of how TV trading works," one senior buyer said.

The other potential remedy was created by Carlton and Granada. It involves ITV creating performance thresholds against which agencies can renegotiate the level of discounts they get on the deals.

Opinion is largely against the proposal, although one buyer said it was "interesting". Marshall, however, summed up the mood: "We're not looking for behavioural remedies but structural ones."