OPINION: Carlton and Granada's gloomy outlook augurs well for merger

Only vague hints have emerged so far about the merger case Carlton and Granada have submitted to the Office of Fair Trading.

Naturally such documents are commercially confidential and anyway it is almost certainly counter productive to try to bounce the OFT into a decision with a public campaign. But there could be another reason for the confidentiality and the resolute 'no comments' - the bleakness of the ITV case.

The two firms will plead such abject poverty that only permission to create ITV plc could possibly help. Luckily they will not have needed to rely heavily on the imagination. The facts, and the trends going forward, are grim enough.

The first thing to do, of course, it to argue about the definition of the market. TV advertising is much too narrow a concept and the fact that ITV holds more than 50% of it could create a misleading impression.

Let's look at the entire market for display advertising. That's much more promising. ITV has only between 15% and 17% of that market. How could anyone get hot under the collar about such a modest share.

But should the OFT insist on focusing on TV advertising, then all is not lost here either. It is a little unfortunate that despite everybody's best efforts the share of ITV advertising has remained stubbornly above the symbolically important 50% level. The OFT should not be misled by this unfortunate detail. The trend is very positive - all the way down.

And while it may just scrape in at 52% by the end of the year, there are real grounds for confidence that by next year it will be safely under 50%. Take away Ulster, Scottish and Channel and the job is already done.

For good measure Michael Green and Charles Allen will also have been able to claim that the disgracefully competitive BBC will beat ITV in the overall share of viewing this year for the second year in succession.

For dramatic effect the usual caveats about winning in prime time will be quietly ignored.

If all of that is not pessimistic enough there's still the piece de resistance - commercial impacts. Apart from unfortunate minor blips in September and October, ITV can demonstrate the most horrible trends in commercial impacts across any demographic you care to mention.

Commercial impacts for 16- to 34-year-olds are particularly helpful for the merger case. Since 1996 the ITV share has dropped like a stone - down from 60.7% then to 36.9% now with a particularly remarkable 29% in July.

During that time, Channel 4 has gone from 20.7% of commercial impacts to 17.9% in October. Channel 5 has gone from 4.6% in 1997 to 9.5% now with the cable and satellite share going from 14.9% to 32.9%.

You would think that would be enough gloom for the OFT, but that is unlikely to be the case. Despite their best efforts to talk down their prospects, Carlton and Granada will almost certainly have to be gloomy again next year at the Competition Commission. Happily by then things should be even worse.