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Last Updated: Tuesday, 23 September, 2003, 12:11 GMT 13:11 UK
Moguls eye up ITV
Nick Higham
By Nick Higham
BBC media correspondent

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Overseas investors are eyeing up a merged ITV
Last week's Royal Television Society convention saw the future of ITV come under the spotlight.

So the Americans really are coming. Two of US television's bigger fish came to Cambridge last week and confirmed that, yes, they were interested in buying ITV (as the new Communications Act allows them to) once Carlton and Granada have merged.

"We have a very strong appetite for doing business here in the UK," Mel Karmazin of Viacom told the Royal Television Society's convention.

"We like to do business here. We'd like to buy more."

"We think that under the right circumstances ITV is a great opportunity," said the Hollywood billionaire Haim Saban.

But both Karmazin (whose other targets in the UK could well include radio companies like Capital or GWR) and Saban (who already has a stake in European commercial television, having bought Germany's ProSiebenSat1 last month) made clear their interest was strictly conditional.

Price

One condition, of course, is price. Viacom, whose impressive portfolio of broadcasting and media assets includes CBS and MTV, Paramount and Blockbuster, Nickelodeon and the US radio company Infinity, is a publicly quoted company whose stockholders expect steady growth.

Buying ITV might well allow it to grow, but only if it doesn't overpay.

The other big condition is that a merged ITV is allowed to retain its advertising sales operations. This is by no means certain.

The trade secretary Patricia Hewitt is currently considering a Competition Commission report on the Carlton-Granada merger which is believed to recommend that one or both companies hive off their ad sales arms before being allowed to combine, because between them they control some 52 per cent of the TV advertising market.

Karmazin, an airtime salesman by background, thinks one way to improve ITV's performance is to improve its sales operations - something Viacom could only do if it owned them.

Saban was more forthright. "We think this idea of separating advertising sales from the company is absolutely insane," he said. The idea "has no hold in commercial reality."

It was like telling Marks and Spencer and Selfridges they could merge, but forcing them to sell their cash tills to someone else.

Not for sale

Of course, ITV doesn't seem to be for sale. Michael Green, the chairman of Carlton, and Charles Allen, the chairman of Granada, were also in Cambridge and made that clear.

And there's also the question of what Greg Dyke called "cultural differences".

The BBC's director-general said he'd always been passionately opposed to the change in the law which allowed American companies to take over ITV - a change rationalised by the government on the grounds that it would attract US management expertise and investment into British broadcasting.

He fears a flood of American programming. Karmazin explicitly rejected such a suggestion, arguing that television is a local business in which national audiences expect to watch national programmes.

It would make no sense for a US owner of ITV to use the channel simply to dump its own programming.

And anyway, even in America Viacom's networks like CBS buy much of their programming from sources other than Viacom's own production arm, Paramount.

'Balanced reporting'

But another indicator of what "cultural differences" might mean came from Saban, an Israeli-American with strong views on the Middle East. He believes British television coverage of Israel - especially the BBC's - is biased and pro-Arab. He said as much to his RTS audience.

So if he owned ITV would he interfere in its journalists' coverage, he was asked? His reply: he'd require balanced reporting on all issues.

The problem might be agreeing a definition of "balanced". To some on the American right the very notion of impartiality is a liberal notion, and thus unacceptable.

American television news, and Fox News in particular, has become overtly partisan in its support for the Bush administration's stance on the war in Iraq and most Americans do not blink at that.

British broadcasters are required by law to be impartial.

The prospect of a man with a background in American television and with passionate and partisan political views on one of the most contentious issues in the modern world, promises a real culture clash.


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