Nandy 'minded to intervene' in Sky's £1.6bn takeover of ITV entertainment arm

Culture Secretary Lisa Nandy has expressed her intent to potentially intervene in the proposed £1.6 billion acquisition of ITV's media and entertainment division by Sky.

Nandy cited valid concerns that the merger might negatively impact both free expression within media platforms and the diversity of news options available in Britain.

In response, Sky indicated that it would "carefully consider" the letter from the Culture Secretary and intends to "engage constructively" with the ongoing review of the transaction.

The company reaffirmed its belief that the unification of Sky and ITV's media and entertainment sectors would result in a more robust British media landscape.

ITV has greeted the communication from Nandy, asserting that the integration would enhance its competitive stance against leading global streaming services, ultimately benefiting viewers, advertisers, and the UK's creative industries.

The acquisition, initially announced in July, encompasses Sky's agreement to purchase ITV's broadcasting business, which includes its free-to-air television channels along with the ITV X streaming platform.

It is important to note that ITV's production unit, ITV Studios, which produces popular shows like Love Island and I'm a Celebrity... Get Me Out of Here, is not included in this deal.

This merger would provide Sky with access to millions of additional viewers, positioning both companies to better compete against major streaming entities such as Netflix.

However, Nandy has communicated her considerations to Sky and ITV regarding the potential issuance of a public interest intervention notice (PIIN) to the competition authority, mandating an investigation of the merger.

In her letter to the companies, she detailed her inclination to invoke an investigation aimed at allowing the Competition and Markets Authority (CMA) to evaluate public interest factors that include:

• The necessity for freedom of opinion in news media
• The demand for diverse viewpoints within the UK news media
• The importance of varied media ownership across the UK
• The requirement for a broad spectrum of programming options available in the UK

Nandy acknowledged that Sky News and ITV News represent two of the most significant sources for television news in the UK, commanding a collective viewer share of 26%.

Despite this, she reassured that consumers still have access to other news outlets such as the BBC and Channel 4.

Nandy expressed her concerns that, in the long term, the merger could limit the diversity of perspectives offered to viewers, with a significant proportion, specifically 86%, of the news market being dominated by the BBC alongside Sky and ITV.

Furthermore, she highlighted that regions in the North of England and other parts of the UK, particularly those of lower socio-economic demographics, could be adversely affected, as broadcast news represents their primary means of gathering information.

Sky and ITV have been allocated until October 20 to respond to Nandy's concerns.

A spokesperson for Sky stated: "We have already articulated clear commitments to safeguarding ITV's identity, its free-to-air services, and its obligations to public service broadcasting. Moreover, we aim to ensure that ITV News and Sky News continue to maintain their distinct editorial identities."

In a similar vein, a spokesperson for ITV remarked: "We welcome the Culture Secretary's indication of a 'minded to' issue regarding a public interest intervention notice, as anticipated, and we look forward to fully cooperating throughout this process. This represents another significant milestone in the regulatory review, paving the way for a UK entity equipped with the scale and resources necessary to enhance competition with global streaming platforms for the benefit of viewers, advertisers, and the UK creative sectors."

Nandy's potential intervention stems from new public interest considerations that will necessitate legislative action, as existing laws currently do not account for the impacts of mergers on streaming or on-demand content.

She commented, "If I choose to proceed with an intervention based on these new public interest considerations, I will introduce legislation to expand the applicability of the public interest criterion regarding broadcast availability to include on-demand programming."