MediaTel

Channel 4 and Channel 5 are understood to be preparing to approach competition regulators to prevent the creation of a single ITV on the grounds that it will control too much of the TV advertising market.

Carlton and Granada announced plans to merge earlier this month ending a period of intense speculation about the future of the troubled ITV Network (see Carlton And Granada Enter Advanced Merger Talks).

The move has received a mixed reception from the broadcasting industry with advertisers and TV stations concerned that the creation of a single ITV sales house could have a detrimental effect on the market for airtime sales (see ITV Merger Must Clear Regulatory Hurdles).

Carlton and Granada already control around 50% of TV advertising revenues and Channel 4 and Channel Five are fearful that the proposed £2.6bn merger (see Carlton And Granada Move Closer To £2.6bn Single ITV Company) will allow the ITV partners to force up the price of TV advertising.

A spokesman for Channel 4 said: "Quite obviously we have major concerns over the competition element of the merger and the effect it will have on airtime sales. It is inevitable that we will be involved in some sort of discussion with competition regulators over the next few weeks as we make our views on the impact of the merger clear."

Channel Five was unavailable for comment this morning, but it is understood that the broadcaster is opposed to the merger on similar grounds.

It is estimated that Carlton and Granada will generate around £50 million in savings if the merger goes ahead and advertisers have welcomed the possibility of greater investment in ITV's programming budget.

Speaking at last week's annual Media Question Time event a panel of key industry figures spoke positively about the creation of a single ITV arguing that a Network capable of delivering mass market audiences would be beneficial for advertisers. Jim Hytner, ITV's commercial director, acknowledged the need to proceed cautiously with regard to sales houses, but insisted that a merger was the best way forward for the "dysfunctional" Network (see Carlton And Granada Merger Will Aid Dysfunctional ITV).

ITV: 0207 843 8000 www.itv.com Channel Four: 020 7396 4444 www.channel4.co.uk Channel 5: 08457 050505 www.channel5.co.uk

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