Granada/Carlton merger creates IT challenge

The £4.5bn merger of Carlton and Granada is projected to create at least £55m worth of savings by combining the operations of the...

The £4.5bn merger of Carlton and Granada is projected to create at least £55m worth of savings by combining the operations of the two ITV companies. However, analysts have said the IT integration could prove to be a challenge.

The merger, which was cleared by the Competition Commission last week, will create one of Europe's largest free-to-air television companies, with more than 50% of the UK's television advertising market.

The projected savings will depend on successfully combining management, marketing, finance production and broadcasting functions and the IT systems that run them, said Adrian Drodz, an analyst at Datamonitor.

"As they have the same parent company, there has to be a certain amount of synergy between the two companies. There will be potential difficulties in aligning the networks and systems. They will have to spend money and take time to ensure the integration is smooth," he said.

The IT integration project has been made easier because the merger has been in the offing for a year, Drodz said.

Charles Allen, chief executive at Granada, confirmed that the integration plan was well advanced, and would lead to a new structure with three divisions; broadcasting, production and news.

Earlier this year, Computer Weekly revealed that the BBC was planning to spend £1.3bn on IT in the next seven years to revolutionise the way it makes television and radio programmes.

All broadcasters will need to invest heavily in storage and management systems to help them manage content, said Tony Hart, managing analyst at Datamonitor.

"There has been an explosion in content, from the programmes that are made to the research and information that supports them. It will become critical for broadcasters to adopt an intelligent storage mechanism supported by a solid management solution."

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