Evening Standard: Will a merged ITV end up foreign-owned?
By David Rowan
THEY blew a billion pounds on a knitted monkey, watched their main audiences dwindle away, and enraged shareholders by taking fat-cat salaries as their stock prices tanked. Now ITV's two most powerful men are preparing for what could be the final scene in Britain's most extraordinary television drama - one which their critics say will end with the death of ITV itself.
In two weeks, Patricia Hewitt, the Trade Secretary, is expected to give the go-ahead to Carlton's £4 billion merger with Granada to create a singIe dominant ITV company. Michael Green of Carlton and Granada's Charles Allen have spent a year arguing that the merger is the only way to preserve the network as a distinct public service broadcaster, and the City has broadIy welcomed an end to uncertainty. Yet in the past few days it has become clear where a green light is likely to lead, as foreign investors have been queuing up, eager to acquire ITV on their own terms. And Allen, and especially Green, are being blamed for letting commercial pressures threaten the interests of British viewers.
Delegates at the Royal Television Society conference in Cambridge last weekend were left in no doubt what the Green-Allen deal will mean. Hain Saban, the US-based billionaire behind Mighty Morphin Power Rangers, brashly told the conference that he would make a takeover approach within days of an official go-ahead. "We will have a couple of weeks of internal studies followed by a meeting with CharIes and Michael," he said, adding ominously that he would not invest "one dollar" if regulators imposed strict conditions.
Mel Karmazin, who runs Viacom, owner of MTV, Paramount and CBS, said that he too had a "strong appetite for doing business here", and could see "synergies" in acquiring ITV.
Publicly, Green was playing down the prospects of a takeover. "I don't think it is even on the cards," he told the conference. He was, though, keen to portray the merged ITV as "a very attractive company" that would appeal to investors. Rival executives who do not want to be named - surprising, given their strength of feeling - are suggesting that after presiding over a painful few years at Carlton, Green is privately delighted at the prospect of selling up to enable him to make a smooth getaway - a claim strongly denied yesterday by his office, which insists that Green and Allen will run a merged operation.
Green, the 55-year-old son of a Brixton shirtmaker who is now valued at £50 million in The Sunday Times Rich List, is an exuberant figure and demanding boss who tends to enjoy the good life. He left Haberdashers' Aske's school with moderate O-levels and started a stationery business, becoming a millionaire by the age of 2. He made the most of his social contacts. He married Janet Wolfson, daughter of Lord Wolfson, chairman of the GUS mail-order empire, although they Iater divorced. He normally shuns publicity, rarely giving interviews. although Iast September he took the unusual step of condemning a John Pilger documentary on his own channel, which he said was unfair to Israel.
Yet senior figures in broadcasting are happier to put their names to criticisms of what foreign ownership will mean. Richard Eyre, the network's former chief executive', believes that foreign investors will "milk ITV for cash for a couple of years, but then you'll be left with a dead ITV". They will wriggle out of their statutory commitment to offer public-service programming, such as local news and education, by quickly switching from analogue to digital broadcasts, he says. "We would all be impoverished if public-service broadcasting were Iost ... we really have to intervene to stop the market making all the decisions."
It may already be too late. Michael Grade, the former Channel 4 chief executive, believes that Green and Allen have already abandoned their public-service commitments to the BBC and Channel 4. "To sit here in 2003 and pretend ITV has anything to do with public-service broadcasting any more is a joke," Grade says.
The City sees a US-type takeover as a no-brainer. "A merged ITV will be a particularly attractive launch pad into the UK market for overseas predators, especially if they have access to English-speaking programming,'' says Simon Baker, media analyst at SG Securities.
For viewers, this is likely to mean more low-budget foreign programming - a scenario causing angst both within ITV's head office and among viewers' groups. "It won't be sudden, but over five or 10 years there will be an erosion of British Ianguage, culture and values," says Jocelyn Hay, chair of Voice of the Listener and Viewer. "Already we've got a situation where fire officers visiting Sussex schools are asking children what they would do if they saw a fire and they're getting the answer 'Dial 911'. Imagine how much worse it will be if there are yet more cheap American programmes."
It remains unclear how Ofcom, the new regulator, would stand up to a determined foreign owner. To the alarm of viewers' groups, Ofcom has 20 per cent fewer staff than the regulators it replaces at the end of the year, yet is charged with 263 separate monitoring tasks, more than twice as many as its predecessors.
But it is the advertisers who are most worried about a foreign takeover. "If ITV were sold off to foreign investors, we in the advertising community would have deep concerns," says Chris Hayward, head of TV buying at Zenith Optimedia. "Would they understand the peculiarity of the UK market? Television has to be about more than churning out the maximum profits." A venture-capital-backed bid led by David Elstein, the former Channel 5 and Sky executive, would at least reassure Hayward - Elstein, after all, knows about British tastes.
Green did not respond to his critics last night. His office insisted it was "fairly hypothetical" talking about a takeover whiIe he was focused on the merger "and on strengthening ITV". Besides, he had worked to push £250 million a year into ITV's public-service programming, a sure sign of his commitment to the network he helped build up. He has, though, told friends privately of his frustration at the level of old-fashioned, sentimental thinking about public-service television in Britain.
Green's reassurances have not convinced those with concerns about his strategy "If shareholders see a way of saving £250 million by dropping their public-service obligations, you can be sure they'll find a way to do so," says Richard Eyre. "And that matters a Iot. We're talking here about something that's part of our culture."
(Evening Standard, September 24 2003)
THEY blew a billion pounds on a knitted monkey, watched their main audiences dwindle away, and enraged shareholders by taking fat-cat salaries as their stock prices tanked. Now ITV's two most powerful men are preparing for what could be the final scene in Britain's most extraordinary television drama - one which their critics say will end with the death of ITV itself.
In two weeks, Patricia Hewitt, the Trade Secretary, is expected to give the go-ahead to Carlton's £4 billion merger with Granada to create a singIe dominant ITV company. Michael Green of Carlton and Granada's Charles Allen have spent a year arguing that the merger is the only way to preserve the network as a distinct public service broadcaster, and the City has broadIy welcomed an end to uncertainty. Yet in the past few days it has become clear where a green light is likely to lead, as foreign investors have been queuing up, eager to acquire ITV on their own terms. And Allen, and especially Green, are being blamed for letting commercial pressures threaten the interests of British viewers.
Delegates at the Royal Television Society conference in Cambridge last weekend were left in no doubt what the Green-Allen deal will mean. Hain Saban, the US-based billionaire behind Mighty Morphin Power Rangers, brashly told the conference that he would make a takeover approach within days of an official go-ahead. "We will have a couple of weeks of internal studies followed by a meeting with CharIes and Michael," he said, adding ominously that he would not invest "one dollar" if regulators imposed strict conditions.
Mel Karmazin, who runs Viacom, owner of MTV, Paramount and CBS, said that he too had a "strong appetite for doing business here", and could see "synergies" in acquiring ITV.
Publicly, Green was playing down the prospects of a takeover. "I don't think it is even on the cards," he told the conference. He was, though, keen to portray the merged ITV as "a very attractive company" that would appeal to investors. Rival executives who do not want to be named - surprising, given their strength of feeling - are suggesting that after presiding over a painful few years at Carlton, Green is privately delighted at the prospect of selling up to enable him to make a smooth getaway - a claim strongly denied yesterday by his office, which insists that Green and Allen will run a merged operation.
Green, the 55-year-old son of a Brixton shirtmaker who is now valued at £50 million in The Sunday Times Rich List, is an exuberant figure and demanding boss who tends to enjoy the good life. He left Haberdashers' Aske's school with moderate O-levels and started a stationery business, becoming a millionaire by the age of 2. He made the most of his social contacts. He married Janet Wolfson, daughter of Lord Wolfson, chairman of the GUS mail-order empire, although they Iater divorced. He normally shuns publicity, rarely giving interviews. although Iast September he took the unusual step of condemning a John Pilger documentary on his own channel, which he said was unfair to Israel.
Yet senior figures in broadcasting are happier to put their names to criticisms of what foreign ownership will mean. Richard Eyre, the network's former chief executive', believes that foreign investors will "milk ITV for cash for a couple of years, but then you'll be left with a dead ITV". They will wriggle out of their statutory commitment to offer public-service programming, such as local news and education, by quickly switching from analogue to digital broadcasts, he says. "We would all be impoverished if public-service broadcasting were Iost ... we really have to intervene to stop the market making all the decisions."
It may already be too late. Michael Grade, the former Channel 4 chief executive, believes that Green and Allen have already abandoned their public-service commitments to the BBC and Channel 4. "To sit here in 2003 and pretend ITV has anything to do with public-service broadcasting any more is a joke," Grade says.
The City sees a US-type takeover as a no-brainer. "A merged ITV will be a particularly attractive launch pad into the UK market for overseas predators, especially if they have access to English-speaking programming,'' says Simon Baker, media analyst at SG Securities.
For viewers, this is likely to mean more low-budget foreign programming - a scenario causing angst both within ITV's head office and among viewers' groups. "It won't be sudden, but over five or 10 years there will be an erosion of British Ianguage, culture and values," says Jocelyn Hay, chair of Voice of the Listener and Viewer. "Already we've got a situation where fire officers visiting Sussex schools are asking children what they would do if they saw a fire and they're getting the answer 'Dial 911'. Imagine how much worse it will be if there are yet more cheap American programmes."
It remains unclear how Ofcom, the new regulator, would stand up to a determined foreign owner. To the alarm of viewers' groups, Ofcom has 20 per cent fewer staff than the regulators it replaces at the end of the year, yet is charged with 263 separate monitoring tasks, more than twice as many as its predecessors.
But it is the advertisers who are most worried about a foreign takeover. "If ITV were sold off to foreign investors, we in the advertising community would have deep concerns," says Chris Hayward, head of TV buying at Zenith Optimedia. "Would they understand the peculiarity of the UK market? Television has to be about more than churning out the maximum profits." A venture-capital-backed bid led by David Elstein, the former Channel 5 and Sky executive, would at least reassure Hayward - Elstein, after all, knows about British tastes.
Green did not respond to his critics last night. His office insisted it was "fairly hypothetical" talking about a takeover whiIe he was focused on the merger "and on strengthening ITV". Besides, he had worked to push £250 million a year into ITV's public-service programming, a sure sign of his commitment to the network he helped build up. He has, though, told friends privately of his frustration at the level of old-fashioned, sentimental thinking about public-service television in Britain.
Green's reassurances have not convinced those with concerns about his strategy "If shareholders see a way of saving £250 million by dropping their public-service obligations, you can be sure they'll find a way to do so," says Richard Eyre. "And that matters a Iot. We're talking here about something that's part of our culture."
(Evening Standard, September 24 2003)
posted by David Rowan at Wednesday, September 24, 2003
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