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The prospect of Comcast taking over ITV has raised concerns about the effect on the UK's public service broadcasting, a situation that Channel 4’s new top boss, moving from a key role at Sky, will be all too well aware of.

Sky’s commercial director, Priya Dogra, will now be tasked to take a leading role to block her former employer’s buyout proposal to defend Channel 4.

The envisaged merger of Sky and ITV’s broadcasting operation would leave Channel 4 a relative commercial minnow in the realm of TV and digital ad sales, reigniting discussion of the need to re-examine some form of alliance with the BBC for future viability.

Foremost Worry: The Future of News

However, it is the possible consequences on the future of news provision that are causing the most urgent concern for many within the television industry.

The shock revelation last month that Comcast, which holds assets including Universal Studios and acquired Rupert Murdoch’s Sky for £30bn in 2018, is financially rational. Traditional broadcasters are facing a profound survival challenge as audiences and revenues continue to swiftly shift to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s move for ITV is causing unease among media watchers, with particular concern for news provision.”

However, the potential £1.6bn acquisition of ITV’s broadcasting arm and streaming service, which would end 70 years of autonomy, is laden with regulatory, political, and competition problems.

At a stroke, Comcast would control Sky News and ITV News—including its extensive regional news operation—and become the largest shareholder in ITN, which produces news for ITV, Channel 4, and Channel 5.

While Comcast’s 40% stake in ITN would not be a majority holding—other shareholders include the owner of the Daily Mail, Thomson Reuters, and Informa—it would still be heavily involved in the news output of most of the main commercial broadcasters.

“If a deal materialises, the fate of ITN is an interesting one that will concentrate attention politically,” comments one senior TV executive. “Effectively, they will be involved in the news output of all the biggest non-BBC channels.”

Financial Commitments and Regulatory Scrutiny

Comcast promised to keep funding Sky News for a decade, upping its funding annually in line with inflation, as part of its 2018 takeover of Sky. As that obligation draws closer to expiring, concerns have been raised about whether the US company will continue to wholly support Sky News, which has an annual budget of £100m but is thought to make losses of as much as £80m.

It is thought that any deal to buy ITV would include assurances not to seek permission from media regulator Ofcom to alter the conditions of its public service broadcast licence, which includes commitments to national and regional news.

“There are definitely questions about plurality,” says Stewart Puvis, a former ITN chief executive. “Theoretically, Comcast could, say, merge Sky and ITV News and use its position as a 40% shareholder in ITN to wield power... I would hope Comcast appreciate ways of solving these problems.”

An Endangered Model

British TV executives have previously highlighted the risk posed to the UK’s system of public service broadcasters (PSBs) by large parts of the industry being snapped up by US corporations.

Recently, Ofcom published a report warning that public service television, such as news provision and UK-focused content, risks becoming an “threatened entity” as viewers migrate to US online platforms and streamers.

The watchdog also revealed data showing that YouTube had exceeded ITV to become the UK’s second most-watched media service, behind only the BBC, with it and Netflix now the two most popular first TV destinations among young people.

A Call for Collaboration

There are those who believe that a Sky takeover of ITV, against the context of the viewer shift to mostly US digital companies, signals the need for closer collaboration between the UK’s biggest broadcasters.

“The UK wants and needs its own part of mass media which isn’t US controlled,” says a second broadcasting executive. “It’s a vital strategic need. I think the government needs to work out how the boards of the PSBs have a new part to their remits that compels them to collaborate.”

Given that advertisers follow eyeballs, a combination of Sky and ITV could create a British TV and streaming powerhouse, with the two companies’ sales houses controlling a dominant share of total ad spend on traditional TV and broadcasters’ streaming services.

Competition Hurdles

Any deal will prompt an investigation by the UK competition watchdog. Sky is hoping the regulator will expand the view of the ad market to include the impact of giants like YouTube and Facebook.

“I think it will get approved,” says Alex DeGroote, a media analyst. “Comcast will do everything it can to say it will maintain the PSB status quo... But you don’t buy to ultimately keep everything the same. ITV plus Sky would give them a hugely dominant position in the TV ad market.”

Structural Challenges of Channel 4 and the BBC

Channel 4, which relies on advertising for the vast majority of its income, now faces a diminished BBC as a potential partner and a formidable commercial threat from a combined Sky-ITV.

“We may at some point end up in that situation because of the deep cumulative cuts to the BBC’s funding and because Channel 4, too, has a inherent financial issue,” says Patrick Barwise, an emeritus professor at London Business School. “Channel 4 has repeatedly outperformed forecasts, but that is just postponing the problem. It’s now beginning to reach its limits.”

The evolving situation emphasises a larger dilemma for British media: how to preserve a domestic voice and a robust public service ecosystem in an progressively globalised and digitally dominated landscape.