Carlton/Granada: don't get too excited

COMMENT - ITV companies Carlton and Granada are back in merger talks. But let's not get too excited, writes Campaign's media editor Ian Darby.

Little has changed since talks were called off earlier this year. Except, perhaps, that the two companies are more desperate as their share prices have fallen even more sharply.

So many barriers and contingencies remain before a merger could take place. Any merger would be dependent on the Communications Bill going through on time with its draft proposals on changes to media ownership in place. This is by no means certain.

The rivalry between the two companies - any merger would effectively be a Granada takeover - has proved a stumbling block in the past. Then there is the major issue of what a merged ITV would do with its sales houses - current monopoly rules say that no broadcaster can control above 50 per cent of airtime sales. The merged ITV would, on current figures, control 54 per cent.

In the long-term though, a merger would benefit both advertisers and viewers. A stronger, united ITV (if this is possible) is something that everybody would welcome except rivals such as Channel 4 and Five.

Opponents of a consolidated sales house operation might find that their arguments against this are swept away because ITV's share of airtime sales is expected to drop below 50% by 2004. But don't count on this merger going forward. Carlton and Granada could agree terms only for a Viacom or an AOL Time Warner to swoop at the last minute.

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