ITV bosses have been given just two weeks to convince the Competition Commission to relax its Contract Rights Renewal scheme, after the watchdog again rejected the commercial broadcaster’s plea to loosen its advertising “straightjacket”.
In a provisional decision published this morning, the Competition Commission indicated that the scheme should only be expanded to include a HD and catch up channel, rather than undergo more radical changes.
That finding was identical to the conclusion drawn by the panel four months ago, but a final decision was delayed until now to allow ITV to change the commissions mind, with bosses proposing a new advertising model.
Chairman Diana Guy said the commission “looked carefully” at the new deal which aimed to “include greater flexibility into negotiations whilst retaining some protection for advertisers”.
But she said: “It has, however, become clear that other variations are not likely to be either practicable or effective.
“We found that it would not provide adequate protection for advertisers and its practical application would raise too many uncertainties and questions.”
The Contract Rights Renewal scheme was introduced as a result of the Carlton and Granada merger in 2003, and limits the money ITV can receive from advertising if its audience falls year-on-year.
Last September, Guy said that while ITV’s share of viewers and advertising had suffered of late, it was still “crucial for advertisers looking to reach large numbers of viewers”.
She added that since the changes in the market had not increased the bargaining strength of the advertising agencies, “it is therefore our view that the remedies have to remain in place”.
Interested parties now have until February 2 to make a submission on the latest ruling, before the watchdog publishes its final decision towards the end of February.
ITV is expected to respond to the ruling shortly. In 2008, former executive chairman Michael Grade called the system a “straitjacket” and called for its removal.