UK culture secretary Lisa Nandy ‘minded to intervene’ in Sky-ITV merger

UK culture secretary Lisa Nandy has said she is “minded to intervene” in Sky’s £1.6bn (US$2.16bn) takeover of commercial broadcast rival ITV.

Lisa Nandy

Comcast-owned pay TV operator Sky struck a deal in July to buy ITV’s Media & Entertainment (M&E) business for a total of up to £1.6bn, which will result in ITV Studios emerging as a standalone content business listed in London.

The deal would mean Sky, in effect, buying ITV’s licence to broadcast, meaning it will adhere to all the regulatory restrictions that come with it: the amount of national and local news in peak, the 25% spend on independent production and commissions outside of London. These will continue post-merger until at least 2034, when that licence comes up for renewal.

ITV Studios will operate as a separate business and be listed on the London stock exchange but will enter into a long-term content supply agreement with ITV M&E and Sky, covering programmes and formats including Coronation Street, Emmerdale, Love Island, I’m a Celebrity… Get Me Out of Here! and its daytime slate.

Nevertheless, the country’s Labour government now has the deal in its crosshairs, with Nandy writing to both companies to express her concerns about the deal.

Nandy has told the companies she is considering issuing a public interest intervention notice to the Competition and Markets Authority and regulator Ofcom which would force both to investigate the deal.

Chief among her concerns is the effect the move would have on the range of news options open to UK viewers.

While Sky News and ITV News attract an audience share of just 26% between them, and other news sources like the BBC and Channel 4 are available, Nandy’s letter expresses concern that soon 86% of news viewing would be divided up between just two entities: the BBC and the merged ITV and Sky.

The letter argues that the north of England, and constituencies like Nandy’s own Wigan, would be particularly affected given the main source of news in those communities is broadcast following the widespread collapse of the local newspaper market in the UK.

Nady is also concerned about the number and range of people owning broadcasters in the UK and the need for “sufficient plurality of persons” with control of the media.

The two companies have been given until October 20 to respond to the concerns but both issued statements today.

ITV Media & Entertainment’s I’m a Celebrity

Sky said: “We will carefully consider the secretary of state’s letter and look forward to engaging constructively as the review progresses.

“We remain confident that bringing Sky and ITV’s Media & Entertainment business together will create a stronger British media business, better able to compete with global streaming platforms, support great British programming and trusted news, and deliver more for audiences.

“We have already made commitments to protect ITV’s identity, its free-to-air services and public service broadcasting obligations, and to ensure ITV News and Sky News remain distinct editorial voices.”

ITV added: “We welcome the publication of the secretary of state’s ‘minded to’ issue a public interest intervention notice letter as was expected and look forward to fully co-operating in the process.

“This is another important milestone in the regulatory review process towards creating a UK player with the scale and resources to better compete with global streaming platforms, benefiting viewers, advertisers and the UK creative industries.”

Speaking at the Edinburgh TV Festival in August, ITV’s Kevin Lygo, MD of media and entertainment, was at pains to stress it was “business as usual” at his channel despite the takeover, and that “Sky wouldn’t be buying us for all that money to destroy us and change what we are.”