ALEX BRUMMER: How will modest players such as ITV compete, survive and grow?


The telephone numbers involved in the Comcast and Murdoch auction for Sky have been staggering.

It has left everyone pondering how, in an age of new global players such as Netflix, will more-modest regional players such as ITV compete, survive and grow?

Clearly life would be better for ITV, Channel 4 and others if the likes of Netflix and Amazon could be regulated and brought under the umbrella of Ofcom chief Sharon White.

Big bucks: The telephone numbers involved in the Comcast and Rupert Murdoch auction for Sky have been staggering

Big bucks: The telephone numbers involved in the Comcast and Rupert Murdoch auction for Sky have been staggering

Big bucks: The telephone numbers involved in the Comcast and Rupert Murdoch auction for Sky have been staggering

The reality is that ITV is doing fine. It has had a good advertising summer as result of the overachievement of Gareth Southgate’s men in Russia. That should continue with the build up to Euro 2020, smartly bought by Adam Crozier before he left the field.

Love Island also has attracted audiences on an unexpected scale. Indeed, there is no better way for advertisers in the UK (Daily Mail notwithstanding) to reach big audiences than through ITV, where tried and tested programmes such as Coronation Street can still capture 8m viewers.

But there is recognition at ITV that investment must go on. Technology, a big selling point for Sky, needs to be updated to meet the digital challenge. ITV also needs to know more about its viewers and needs big data analysis so that advertisers can better target audiences. It also recognises there are users who want to access its programming using catch-up and video over the net, and this too is an earnings opportunity in the short time before commercials go stale.

With her strong marketing background, chief executive Carolyn McCall is equipped to invest in its next growth phase.

That requires shareholders to stop obsessing about quarterly numbers and focus on the medium term.

Savoir faire

Throughout the Brexit process there has been a confidence that when it came to preserving the status of the City it would be all right on the night. A combination of the Square Mile’s deep markets and expertise, trustworthy regulation, a scrupulous legal system and the English language would be enough to secure its role as Europe’s financial hub.

After all, the flexibility of UK regulation attracted eurobond markets to London and the ‘Big Bang’ was a plus for the American and Continental investment banks.

Unfortunately, Britain currently is flailing around on what to do about financial services post-Brexit, as the muddled ideas in the White Paper show.

At a glittering Paris summit this week for bankers and regulators from more than 50 countries, former Rothschild banker President Macron and his acolytes promised to put in ambitious financial infrastructures, pare back regulation and build international schools for the offspring of relocating financiers. The boast was made that HSBC, Morgan Stanley, Goldman Sachs and Blackrock have already made the leap to Paris, adding 3,500 jobs with up to 20,000 to be created.

What is fascinating is France’s determination to move to more lighter-touch regulation.

The reforms made in the City post the financial crisis were intended to make it systemically safer. But intrusive regulation by sub-quality staff at the Financial Conduct Authority are driving some of the significant firms to distraction. The cost of equity capital has also been driven to such unacceptable levels that is making the UK uncompetitive with New York, Singapore and elsewhere.

Among the reasons that the Prudential has decided to do the splits and shift its fast-growing Asian operations into a separate entity is to escape stifling regulation.

Don’t expect the French to play fair. The conviction in absentia in London of citizen Philippe Moryoussef over his role in a five-year plot to manipulate the Euribor interest rate is a case in point.

He remains out of the reach of British courts ‘under the protection of French law’. So much for regulatory equivalence across the single market.

Unfinished work

Old retailers may be dying but there are new players ready to fill the space.

Latest to join the quoted list is discount stationery-and-hobbies chain The Works. It already has 447 stores and has shifted up to 8.9pc of its annual sales of £166m online.

If there is a reservation it is that the newcomer is being offered by private equity firm Endless, and it and the founders will extract £36m from the float.

New investors may fear not enough value has been left under the counter.


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