Extension granted on Carlton-Granada merger report

Trade and Industry secretary, Patricia Hewitt, has today issued a two-month extension to the Competition Commission to decide the outcome of the proposed £3 billion merger between ITV's two largest firms, Carlton and Granada.
According to Hewitt, the deadline for the commission to report on the merger will now be delayed until August 26.
She said: "I have decided to give the competition commission a two-month extension to ensure all the interested parties have an opportunity to comment on the alternative remedies that have been suggested and to allow time for proper consideration before a decision is made.”
The announcment follows yesterday’s request from the Commission for an extension to investigate two new proposals put forward by Carlton and Granada that would allow them to merge without selling their advertising sales houses.
However, advertisers argue that if the merger is allowed to go ahead, it would give ITV too much power, with a 52% share of the advertising market.
The first new proposal would involve auctioning some television advertising space each year, which would then be traded in an outside market.
The second proposed solution would allow media buyers and advertisers to renew their contracts with the broadcasters on the same terms each year. This would allow them to maintain their discounts, which they receive for allocating a section of their budget each year to ITV advertising space. Under this proposal, if ITV ratings decreased, advertisers would also be able to reduce their share of airtime.
In a statement on the ongoing inquiry into the proposed merger the Commission said: “It should be clearly understood that the basis on which all of these possible remedies are being raised is entirely hypothetical. It does not imply that the Commission has reached any conclusion on whether the proposed merger is likely to be against the public interest.
"It is being published now to give interested parties as much time as possible to comment on the possible remedies that the Commission may consider, consistent with maintaining the completion date for this inquiry.”
However, if the Commission decides in August that the firms must sell their advertising sales houses, it is thought that the merger deal may fall apart.
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