Commission could delay Carlton Granada merger report

LONDON - The Competition Commission may seek to delay its report into the proposed £2.6bn merger of ITV giants Carlton and Granada so that it can further consult rival TV channels.

The commission said yesterday that it might need to take more soundings on the thorny issue of TV advertising airtime prices. It was originally due to give its verdict and any remedies for competition concerns to trade and industry secretary Patricia Hewitt by June 25.

The body is allowed to apply to the government for one extension, to last a maximum of three months, during its investigation.

In a statement, it said: "We have received a number of proposals for remedies which we are currently considering. If we find it necessary to consult on these further remedies, we would clearly need more time."

Carlton and Granada last week proposed a new system for selling airtime on ITV1, under which the cost of advertising would rise when ratings were high and fall if programme ratings disappointed.

Advertisers are unhappy with the current system, and fear costs would rise further after consolidation. The current pricing system is based on the average station price, which is calculated by dividing advertising revenue by the number of people viewing the ads in an ITV region.

Meanwhile, Carlton is reported to be covering its bases by planning cuts to ITV's programming budget should its merger with Granada collapse. The broadcaster is examining budget cuts of up to £200m -- ITV currently has £836m to spend on TV shows.

Carlton has suffered from the advertising downturn, and is believed to be wanting to shore up its financial position to make it more attractive to other buyers should the merger fall through.

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