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The prospect of the American media conglomerate taking over ITV has prompted worries about the impact on British public service broadcasting, a situation that Channel 4’s new CEO, moving from a high-ranking position at Sky, will be all too well aware of.

Sky’s advertising chief, Priya Dogra, will now be tasked to take a leading role to oppose her ex-company's buyout proposal to protect Channel 4.

The potential union of Sky and ITV’s terrestrial and streaming assets would leave Channel 4 a much smaller player in the realm of TV and digital ad sales, reviving discussion of the need to revisit some form of partnership with the BBC for long-term survival.

Immediate Alarm: The Future of News

However, it is the likely impacts on the future of news output that are causing the most immediate alarm for many within the television industry.

The unexpected announcement last month that Comcast, which controls assets including Universal Studios and bought Rupert Murdoch’s Sky for £30bn in 2018, is a logical business move. Traditional broadcasters are facing a profound survival challenge as audiences and revenues continue to rapidly migrate to global digital players such as Meta, Google, Amazon, and Netflix.

“Comcast’s bid for ITV is causing nervousness among media watchers, with especial focus for news provision.”

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

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

While Comcast’s 40% stake in ITN would not be a dominant share—other shareholders include the owner of the Daily Mail, Thomson Reuters, and Informa—it would still be deeply engaged in the news output of most of the main non-BBC broadcasters.

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

Investment Promises and Regulatory Scrutiny

Comcast guaranteed to keep funding Sky News for a decade, raising its funding annually in line with inflation, as part of its 2018 takeover of Sky. As that commitment 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 lose money 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 change the conditions of its public service broadcast licence, which includes obligations to national and regional news.

“There are certainly questions about diversity of voice,” 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 assert control... I would hope Comcast appreciate ways of solving these problems.”

Pressure on Public Service

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 taken over 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 surpassed 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.

Strategic Imperatives

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

“The UK requires and deserves 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 titan, with the two companies’ sales houses controlling a dominant share of total ad spend on traditional TV and broadcasters’ streaming services.

Regulatory Hurdles

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

“I think it will get passed,” 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.”

Funding Problems 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 core budgetary challenge,” 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 face a crunch point.”

The evolving situation underscores a wider conundrum for British media: how to maintain a domestic voice and a diverse public service ecosystem in an increasingly globalised and digitally dominated landscape.