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Tuesday, 12 December, 2000, 17:30 GMT
Media reform heralds single ITV
ITV newsreaders Dermot Murnaghan (left) and Sir Trevor Macdonald
ITN may face a stiffer challenge from Sky to be ITV's news provider
One of the most immediate implications for business of the UK government's plans for media reform is the possibility of greater consolidation among ITV television companies.

Topping the list will be the opportunity for the two ITV giants Carlton Communications and Granada Media to combine their television assets.

New rules will scrap laws that bar any one company from owning London's two franchises - weekday and weekend - and forbid any one ITV player from controlling more than 15% of the total television audience.

Regulators had previously also set tough conditions for approving mergers and acquisitions, which Carlton blamed, when ditching its plans to merge with former ITV rival United News & Media.

United's television assets were later sold to Granada, which, in turn, sold the HTV franchise on to Carlton to satisfy regulators.

But this kind of two-step will now not be necessary.

Carlton, which owns London's weekday television franchise, and Granada, which has the weekend's LWT, are likely to be keen to tie their franchises together, analysts say.

ITN changes?

Media reform is also expected to be the catalyst for a wave of merger and acquisition activity among commercial radio stations.

Pre-empting the white paper's publication, SMG - owner of Virgin Radio - last week bought a 14.9% stake in rival Scottish Radio Holdings.

More deals along these lines are likely to follow soon and might reduce the number of players in the market to as few as three from 12, analysts say.

Independent Television News (ITN) - the supplier of news bulletins to ITV - could, in time, also be in line for some ownership changes.

The government on Tuesday said it would consider relaxing the rules which prohibit one firm from owning more than 20% of ITN.

At present, ITN is co-owned by Associated Newspapers, Carlton, Granada, Reuters and United.

Any relaxation of rules would allow United - now focused on being a market information provider - to sell its stake to a partner.

Murdoch's moves

It could also open the way for Sky News - 37.5% owned by media magnate Rupert Murdoch - to challenge ITN's position as ITV news supplier.

In its white paper, the government side-stepped the sensitive issue of cross-media holdings, saying it would invite comment on current rules.

These include a ban on newspaper owners with more than 20% of the market from owning an ITV, Channel 5 or commercial radio franchise.

Any relaxation might allow newspaper owners such as Mr Murdoch to expand further into other media.

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See also:

24 Oct 00 | Business
ITV shake-up continues
28 Jul 00 | Business
Granada dominates ITV
18 Jul 00 | Business
ITV: What next?
04 Aug 00 | Business
United News sharpens focus
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