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The culture secretary has warned she is “minded” to intervene in Sky’s £1.6bn deal to buy ITV’s broadcasting and streaming operations.
Lisa Nandy said she had a number of potential public interest concerns and wrote to both companies before making a final decision on whether to call for regulatory review.
Sky and ITV were given until Tuesday 20 October to respond.
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ITV agreed the deal with Sky, the owner of Sky News, for its media and entertainment arm in July following months of talks.
The agreement, subject to both shareholder and regulatory approval, would create the UK’s largest commercial broadcaster via the acquisition of the ITVX platform and ITV’s free-to-air channels but not ITV studio operations.
Both companies said that under the terms, ITV channels with shows such as Coronation Street, Emmerdale, I’m a celebrity… Get Me Out of Here! and Love Island would remain free-to-air.
They added that all ITV public service broadcast commitments will also be maintained with ITV News – produced by Independent Television News (ITN) – and Sky News set to remain distinct editorial voices.
Ms. Nandy’s concerns include the need for free speech in the news media, the need for a sufficient diversity of opinion in the media in each market for news media and the need for a “sufficient plurality of persons” in control of media companies.
STREAMING TAKES CENTER STAGE IN NANDY CONSIDERATIONS
Lisa Nandy’s declaration that she was “minded to” intervene in the £1.6bn Sky-ITV takeover marked the formal start of a regulatory process that both companies accepted was inevitable.
The acquisition of the UK’s largest commercial free-to-air broadcaster by the largest pay TV operator, not only here but in Europe, was always likely to command the Secretary of State’s attention.
Their reasons for possible intervention are also no surprise. The role of the Secretary of Culture is to protect the public interest, free speech and a “plurality” of opinions in the news, as well as the people who control the output, are cornerstones of public broadcasting.
Their fourth reason for possible intervention, the need to ensure a wide range of broadcasts of high quality “calculated to appeal to a wide variety of tastes and interests”, was also expected.
One technical detail, however, reflects the transformed broadcast landscape of which this deal is a product. For the first time, the Secretary of State will apply the “taste and interest” test to on-demand programming.
Streaming wasn’t an option when the Enterprise Act was written, but its rise is at the heart of this deal. Both Sky and ITV argue that combined they have the scale to compete with US giants led by Netflix. The unspoken implication is that they will struggle alone.
Sky says it will maintain ITV’s identity and public service offering and ensure that Sky News and ITV News remain “distinct editorial voices”. Both companies argue that while they together account for 70% of TV advertising, TV is a contract market now dwarfed by online advertising.
Should the Secretary of State proceed with a notice of public interest intervention, media regulator Ofcom and the Competition and Markets Authority will investigate the deal, reporting a final decision sometime in 2027.
It is not a security. Earlier this year, Ms. Nandy said she was supposed to intervene in the takeover of Paramount-Warner Brothers, but in the event did nothing. Few expect her to sit on her hands as the biggest UK media deal in decades plays out.
She also identified a need – currently unspecified under the Enterprise Act that governs the monitoring of such deals – for the “availability throughout the United Kingdom of a wide range of broadcasts, on-demand programs or both, which (if either is, or as the case may be, both, taken as a whole), is of high quality and calculated to appeal to a wide variety of tastes and interests.”
Ms Nandy added: “If I decide to issue an intervention notice, the next stage would be for Ofcom to assess and report to me on the public interest considerations, and for the Competition and Markets Authority (CMA) to assess and report to me whether a relevant merger situation has been created, and any impact this may have on competition.
“Following these reports, I must decide whether to refer the matter for a more detailed investigation by the CMA under section 45 of the Act.
“I will update Parliament as soon as possible on my final decision.”
A spokesperson for Sky said: “We will consider the Secretary of State’s letter carefully and look forward to engaging constructively as the review continues.
“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 clear commitments to protect ITV’s identity, its free-to-air services and public service obligations, and to ensure that ITV News and Sky News remain distinct editorial voices.”
An ITV spokesman said it welcomed the culture secretary’s letter and “looks forward to co-operating fully in the process”.
“This is another important milestone in the regulatory review process to create a UK player with the scale and resources to better compete with global streaming platforms to benefit viewers, advertisers and the UK creative industries,” the spokesperson added.
