OPINION: Stuart Elliott in America

It's the merger Madison Avenue just cannot stop buzzing about.

D'Arcy merging with Leo Burnett? With Saatchi & Saatchi? With Fallon?

Cordiant merging with Havas? With Grey?

No, CNN merging with the ABC News division of the big American broadcast TV network ABC.

The speculation, fuelled by an article in The Los Angeles Times, came as agency executives were starting to anticipate a lull in the continual round of takeovers and acquisitions that has consolidated and concentrated the ownership of the major US media at a handful of conglomerates including AOL Time Warner, the parent of CNN, and Disney, the owner of ABC.

The hope was that the plunging prices of stock-market shares would force media moguls to take a forced holiday from their manic mergermania, which the agency executives fear has given the sellers the upper hand in negotiations with the buyers of commercial time and advertising space.

The formation of giant media agencies such as Magna Global, MindShare, Starcom MediaVest and Zenith Optimedia was intended to help get the pendulum of power to swing back toward advertisers in the wake of takeovers such as Disney's purchase of ABC and Viacom's of CBS. More often than not, however, the broadcast TV networks have been able to maintain their hegemony and raise prices at will.

In fact, even as the economy remains wobbly, broadcasters are now charging upwards of 20 per cent more for commercials during the primetime season than they raked in during the spring, when they shattered a record by booking more than $8 billion worth of advance orders. Some networks are already practically sold out for the fourth quarter, when demand for spots increases for the crucial shopping weeks before Christmas.

Under the plan being scrutinised by AOL Time Warner and Disney, which apparently has been discussed on and off since early last year, CNN and ABC News would be spun off into a separate company in which AOL Time Warner would hold a controlling stake somewhere in the vicinity of 67 to 75 per cent.

The reason? Though ABC News is a more venerable newsgathering organisation, and its flagship weeknight newscast is watched by more viewers than any programme on CNN, CNN's revenues, at $1.6 billion, exceed ABC News', at $600 million. That's primarily because CNN is on 24/7, as the kids say, in America and around the world, meaning that it takes in much more revenues from selling commercials than ABC News, which perhaps accumulates 24 hours of airtime in a week on ABC.

And there's the profit picture: CNN's annual pre-tax profits, estimated at $200 million, far exceed ABC News', estimated at $15 million to $60 million. Whatever those figures are, they could be fattened substantially by a merger because, analysts believe, a combined ABC-CNN - which I am christening CANBCN, pronounced "Can Be Seen" - would be able to reduce annual costs by as much as $200 million through steps such as combining news bureaus and merging ad sales staffs.

"We'd be thrilled if it happened," Michael Eisner, the chief executive of Disney, told an investor conference last week. Though he placed the odds of a merger at 50-50, there's already speculation that if it happens, it would augur a merger of AOL Time Warner and Disney.

Imagine how Madison Avenue might respond to that. InterOmniWPPublipublic, anyone?