ITV fails to overturn ad charges ruling

Contracts Rights Renewal scheme limits how ITV sells ads

LONDON -- ITV's brand new boss Adam Crozier took an early setback Wednesday when regulators nixed the broadcaster's long-running bid to change the way its advertising sales inventory is sold.

Antitrust regulator The Competition Commission Tuesday upheld its previous ruling, saying that the mechanism must remain in place "for now" because it protects advertisers and rival commercial broadcasters.

The decision prompted Crozier to declare war on what he claimed was over-regulation strangling the U.K. media sector, hampering creativity and production into the bargain.

"In our view today's decision fires the starting gun for a broader campaign for liberalization to enable creative Britain and the enterprise media sector to compete on a level playing field against global competition in the digital age," Crozier said.

"Competition law and the regulation of the U.K. media sector require urgent modernization to take account of the public interest."

However, such talk may not result in much action.

The turbulent economic situation unfolding across the Eurozone and the uncertainties associated with the new coalition government between the Tories and Liberal Democrats -- will likely leave little appetite for a parliamentary overhaul of the media sector, particularly when such issues as public spending cuts and the value of sterling remain the most pressing economic factors.

ITV's campaign to dismantle the complex contract rights renewal (CRR) mechanism -- which links how much advertisers have to pay to ITV's audience share -- began under previous chief executive Michael Grade, who also failed to see them overturned.

"Despite all the changes in this market, no other channel or medium can come close to matching the size of audience that ITV regularly provides," said Diana Guy, chair of the Competition Commission's CRR review panel.

"So the essential reason for the CRR undertakings remains: to protect advertisers and other commercial broadcasters."

ITV had lobbied the Commission to say that the mechanism was punishing its creativity and success, but the regulator responded that the broadcaster's concerns were "overstated."

Crozier, who took the reins at ITV earlier this month, said the ruling was damaging to British creativity and failed to recognize the realities of ITV's position.

"Today's ruling is out of touch and damaging for the interests of creative Britain. U.K. media is over-regulated and this has to change if we value and want to sustain a vibrant independent broadcasting sector that can rival the BBC and compete on a global stage," he said.
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