Granada and Carlton, the UK's two largest commercial broadcasters, today announced details of the long awaited merger that will put most of Britain's free-TV under one management. But the impact for the film industry has yet to become clear.
As their finances have become increasingly strained, both groups have pulled away from film-making. And while the merger is expected to lead to annual savings of $54.4m (£35m), no suggestion has been made that any of this would be invested in film-making.
The merger, valued at $4bn (£2.6bn), is the second time the companies have tried to get together. In February a previous attempt was derailed when Carlton's share price climbed sharply. The new deal, which will give the joint company ownership of 11 of the 15 regional ITV franchises, is subject to regulatory approval and may not be completed until a change of law, expected by the end of 2003.
Under present rules no company is allowed to control more than 15% of the UK's TV advertising market. The new company is expected to have a 55% share of the TV ad market, a 20% share of television audiences and 30% of prime-time viewers. The companies have argued that they need to merge to create an ITV with a single vision and to better compete against nationwide rivals such as Channel 4, Channel 5 and BSkyB as well as the non-commercial BBC. The two companies were also drawn together by combined losses of some $1.2bn (£750m) from the collapsed ITV Digital (formerly ONdigital) digital terrestrial platform.
Granada closed its film production and investment unit Granada Film only last month. It blamed the downturn in advertising for the decision and said that it wanted to return to core activities. The small operation had recently enjoyed a string of feature successes including Berlin festival winner Bloody Sunday, The House Of Mirth and Ghost World. Upcoming releases include The Gathering and Mira Nair's Vanity Fair, now likely to be housed at a new company headed by Pippa Cross and Jeanette Day.
Carlton's involvement with features has been even more complicated. In the late 1990s it bought giant Rank Group, but by 1998 closed its film production and distribution arms. Since then it has sold Rank film assets Technicolor and Quantel but expanded its cinema advertising activities through the acquisition of Screeenvision. Through Carlton America it is a major producer of TV movies. And it is active in the library films sector. It operates the ITC, Rank, Rohauer, Korda and Romulus film collections, which between them include classics such as Brief Encounter, The African Queen, Birth Of A Nation and Richard III.
Carlton chief Michael Green is expected to become chairman of the new group and Granada boss Charles Allen its new chief executive.