Does Comcast’s bid for ITV mean the end for either ITN or Sky News?
Who will survive the TV news Hunger Games?
A Guardian columnist once described ITN as a perfectly healthy patient who might have a heart attack and die at any moment. It is a good metaphor for a company that has always relied on a few big contracts to supply news to commercial public service broadcasters, to ensure its financial health.
Chief among them is the ITV News contract to supply national and international news to the biggest of the three commercial PSBs, as well as the local ITV News London service. ITN in total turned over a little more than £150m last year, the bulk of it coming from news production for ITV, Channel 4, and Channel 5. News production was worth about £113m in total, which equates, very roughly, to an ITV news contract worth around £50-£55m, Channel 4 £30-35m and Channel 5 £10-12m a year, with specials and additional projects, such as election coverage, making up the rest.
Last year, the company made less than £800,000 in profit, partly because it continues to service an extremely expensive legacy pension scheme that has been £100m underwater for a couple of decades.
You can see why any change to the ITV News contract could be fatal to the company; it would put a third of its total income at risk. So, with news that Comcast is interested in buying ITN’s owner, ITV’s broadcast business, there’s not unreasonable disquiet in the company – as reported in this week’s Private Eye.
Industry observers have noted that should Comcast – the current owner of Sky – buy ITV, it would be spending somewhere north of £200m on news across the two businesses. As well as the contract with ITN, ITV spends £70-80m on regional news and its current affairs programmes. Sky News’s budget is about £120m a year – losses are reported to be circa £70-80m. But I would suggest that it is Sky, not ITN, that finds itself in the riskiest position.
When Comcast bought Sky in 2018, it promised to continue investing in Sky News for 10 years. The end date for that commitment is coming up fast, and Sky News’s boss, David Rhodes, has been plotting a future in which the channel starts generating income through subscriptions and premium online products. Insiders also anticipate future cost-cutting beyond the Comcast pledge to bring the overall budget more in line with ITN’s costs.
But all that would be off the table if Comcast’s bid for ITV were successful, and there’s no doubt that the company would be looking for savings in news if Sky and ITV came under single ownership. It is not unreasonable to think that the government would extract guarantees around ITV’s PSB future and news provision as part of a sale, and Comcast would want the privileges that being a PSB grants ITV through prominence, crown jewel sports rights and so on.
All this could mean real difficulties for Sky News. Its future strategy and budget would be under real pressure. What would the incentive be for Comcast to continue funding it if it could point to spending on news through ITV? All points for the government to consider before regulatory approval could be agreed.