Culture secretary Lisa Nandy is “minded to intervene” in Sky’s proposed £1.6bn takeover of ITV’s media and entertainment arm.
In a statement to MPs, she said: “Having considered the anticipated merger, I am of the view that there are reasonable grounds to believe that it might affect availability of a wide range of high-quality and varied programming on the on-demand platforms that are now widely used by UK audiences.”
ITV, which is listed on the London Stock Exchange, and Sky have until 20 October to respond to reassure Nandy over competition concerns.
The handover to Sky, which is owned by Comcast, the US media conglomerate that owns NBCUniversal, has put investors and state officials on alert over recent months.
ITV’s share price has fallen by more than 37 per cent over the last five years, continuing to suffer a fall this year.
A letter on the possible intervention, which was issued by the Department for Culture, Media and Sport, warned on competition rules and the need for free expression in news media, as well as the plurality of broadcasting and on-demand programmes to appeal to a variety of audiences.
Bosses pledged to keep ITV News and Sky News separate until 2030. Sky News is already on a roadmap to add paywalls. Its new app on issues around defence and the military charges customers £14.99 per month.
ITV and Sky’s battle to persuade Nandy
A possible intervention would throw a spanner in the works of a huge takeover deal for UK media. The deal does not cover ITV’s production arm, which makes some popular programmes such as Love Island.
Carolyn McCall, the former Easyjet boss who now leads ITV, emphasised that top British platforms were competing against the likes of Youtube and Netflix.
An ITV spokesman said the FTSE 250 firm would “look forward to fully cooperating” with the government following its public interest intervention notice letter.
“This is another important milestone in the regulatory review process towards creating a UK player with the scale and resources to better compete with global streaming platforms benefiting viewers, advertisers and the UK creative industries,” the spokesman said.
A Sky spokesman said: “We will carefully consider the Secretary of State’s letter and look forward to engaging constructively as the review progresses.
“We remain confident that bringing Sky and ITV’s Media and Entertainment business together will create a stronger British media business, better able to compete with global streaming platforms, support great British programming and trusted news, and deliver more for audiences.
“We have already made clear commitments to protect ITV’s identity, its free-to-air services and public service broadcasting obligations, and to ensure ITV News and Sky News remain distinct editorial voices.”