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Will ITV win a deal on CRR so Jeremy Hunt can wave through News Corp BSkyB deal?

As I recall ITV wasn’t one of the UK media owners that objected to News Corporation’s bid for the 61 per cent of pay-TV broadcaster BSkyB it doesn’t own (the broadcaster objectors included the BBC, Channel 4 and BT).

But arguably ITV has been been the biggest loser from the remorseless rise of Sky, not in terms of losing ad revenue but in cash generation which means, among other things, the ability to make quality programmes.

And ITV executives, even the new lot, won’t have forgotten that they gave Sky a vital leg up by allowing Sky to trump its bid for what became live Premiership football.

Now News Corporation is pulling out all the stops to persuade coalition government culture secretary Jeremy Hunt to allow its Sky bid. It has even hinted it would be prepared to sell some of its newspaper assets although it’s not clear who would want to buy the spectacularly loss-making The Times.

It has also called in outside lawyers to look into suspended News of the World news editor Ian Edmondson’s alleged phone hacking activities, recognising belatedly that it’s going to have to take a big hit so it may as well get it over with.

As for ITV it’s been griping about the CRR formula, whereby it can’t increase prices to advertisers unless its ratings go through the roof, ever since its then CEO Charles Allen invented the damn thing to persuade the competition authorities to allow the merger of Carlton and Granada into ITV against the wishes of advertisers.

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Jeremy Hunt, who is markedly more liberal on media regulation (or rather deregulation) than his media supervision predecessor Vince Cable, has said in the past that he didn’t favour CRR and has chosen to repeat the message armed with his new powers.

Which is a whopping great bonus for ITV which had resigned itself to a few more years of its self-inflicted wound.

But it would be hard for Hunt to say to Rupert Murdoch and News Corporation “You go and be as big as you like,” and still keep the double bridle on sales at the now much smaller ITV.

Hunt clearly takes the view that most UK advertisers are big enough and tough enough to reject huge price hikes at ITV, especially as they’ve been happily ploughing huge amounts of money into the internet for the past decade.

Of course none of this might happen, or not yet anyway as more cautious ministers may persuade Hunt to shuffle News’ bid off to the Competition Commission for a year or so. But they may also take the view that News is more likely to be cut down to size (a bit anyway) by concessions it is prepared to make now for a quick deal rather than by anything the CC might decide.

The one thing News will fear is new evidence emerging to the effect that everyone at the News of the World and in the upper echelons of News management knew all about rampant phone hacking. But that’s hardly likely as they all deny it don’t they?

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As for departing ITV sales director Gary Digby he will have yet another reason to feel unjustly treated if his youthful successor Kelly Williams from Channel 5 inherits not just a post-recession ITV but one that isn’t lumbered with CRR either.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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