14/10/2002 - Granada and Carlton in talks to create the UK’s largest inde-pendent TV company, and head off the BBC & BskyB challenge

The UK’s two biggest commercial TV broadcasters, Granada and Carlton announced on 12 October that their long-awaited merger is back on the table.
The merger would create a single enlarged ITV (Independent Television) company worth around £2,7 billion (Euros4bn) with Michael Green, now chairman of Carlton as chairman of the new entity, and Granada’s Charles Allen as chief executive. ITV plc -its official name- will rely on a 55 per cent share of the TV advertising market and would enable the currently struggling Granada and Carlton groups to save around £30m(Euros45mn) in costs thanks to reductions in infrastructure and staff.
With the merger, a new Network Centre for the whole ITV network –comprising 15 regional British commercial channels, seven of which controlled by Granada and six by Carlton - would be managed as a joint-venture, although advertising sales would still be handled separately.
In a statement, Mr Green said: “A single ITV is within sight. In a rapidly changing broadcast industry, we need to combine to compete effectively. Delay is not in the interest of viewers, advertisers, stakeholders or the future of broadcasting”.
The merger for Carlton and Granada seems indeed inevitable in the face of weaker advertising revenues for all broadcasters, slumping TV ratings for the ITV network (down from 50 to 25 per cent over the last 10 years), and increasing competition from the cash rich BBC and BSkyB that are both aggressively eating up ITV’s younger TV audience.
The BBC and BSkyB’s plan for digital terrestrial TV that will open the air to 20 new channels in the UK is yet another challenge for Carlton and Granada who themselves tried to launch their own digital platform, ITV Digital, and lost more than £1.5 billion (Euros2.25bn) in the foray.
Although rival channels are certain to try and prevent this merger, ITV plc will benefit from next year’s new Communication Bill that will lift the current restrictions of media ownership in the UK.
No ITV broadcaster has a permanent film arm following the closure last September of Granada’s film division.

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