Crozier Faces Steep Learning Curve at ITV; MEDIA ANALYSIS

The Evening Standard (London, England), February 3, 2010 | Go to article overview

Crozier Faces Steep Learning Curve at ITV; MEDIA ANALYSIS


Byline: Gideon Spanier

HOW much of a risk is ITV's new chairman Archie Norman taking by hiring Royal Mail boss Adam Crozier to be his chief executive when neither of them has any experience of broadcasting? Many in the City have hailed Crozier as the "agent for change" that troubled ITV needs in the digital age after he turned around the Post Office, the Football Association and advertising agency Saatchi & Saatchi.

But the fear in TV circles is that Crozier does not have the experience to nurture a creative business and develop hit formats.

"The grocers have succeeded the caterers," sniffs one senior TV figure, referring to the fact that Norman used to run Asda supermarkets and Crozier is a one-time Mars trainee while ex-ITV chief Charles Allen rose to power running Granada's catering business. This isn't just snootiness. The troubled experiences of other media CEOs without a programming background such as Allen and Andy Duncan (who couldn't look beyond Big Brother at Channel 4) suggest it won't be easy for a broadcasting novice.

Yet it is also true that Crozier's predecessor Michael Grade was steeped in TV and didn't cover himself in glory. Those close to Norman say one of the reasons he didn't choose a "broadcasting genius" as CEO was precisely because he felt an overhaul of programming is not the priority. Instead Norman wanted to hire someone who could transform the business so that Britain's biggest commercial terrestrial broadcaster is "unrecognisably different" in five years.

It is understood that Norman did seriously consider a US TV chief but it was felt the candidate wouldn't easily understand the UK regulatory market and salary demands were likely to be another stumbling-block. So Crozier has his chance. If he hits his targets, he stands to earn as much as [pounds sterling]16 million in the next five years.

So how radical will he be when he starts in April? Here are the key issues: Not such a bad inheritance Crozier will know ITV's 2009 results, announced next month, are going to be ugly but 2010 is looking better.

Advertising, more than three-quarters of turnover, is recovering after X-Factor showed ITV can deliver 15 million-plus audiences that no other commercial broadcaster can match. December saw ITV's first growth in advertising in 18 months although insiders won't give anything away about trading since.

Norman insists cost-cutting won't be a priority. ITV's existing management cut [pounds sterling]155 million in costs last year and a further [pounds sterling]215 million is planned.

But expect big structural change. The Norman-Crozier view is that ITV has not suffered from a failure of aspiration, it was of execution and organisation.

Relaxing regulation The ITV chairman singled out Crozier's ability to deal with regulators at Royal Mail as an asset, declaring ITV is Britain's "most regulated" company.

Norman is carrying on where Grade left off by calling for the Competition Commission to axe Contract Rights Renewal, the rules which limit ITV's advertising rates as the dominant player. Years of lobbying haven't yielded many concessions but Norman, a former Tory MP, and Crozier will keep making very loud noises in the hope that a new Government will ease CRR and other restrictions such as the number of advertising minutes allowed per hour.

Relaxing product placement, which both Labour and the Tories favour, should boost revenues too.

Introduce pay-TV model ITV is keen to be less reliant on advertising.

One option is to switch some of its free digital channels, ITV2, ITV3 and ITV4, to a pay model. ITV remains a great brand and could bring in solid subscription fees from BSkyB, Virgin Media, BT and so on.

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