ITV - and Then There Was One; Media

The Evening Standard (London, England), October 22, 2003 | Go to article overview

ITV - and Then There Was One; Media


Byline: ANDREW NEIL

HE CAN not be seen to smile broadly in public but we can be sure Granada boss Charles Allen will be dancing a little jig of delight behind closed doors at the failure of Michael Green, his opposite number at Carlton, to become chairman of the new ITV plc, the [pounds sterling]4.6 billion company created by the merger of the two companies.

Allen is still set to be chief executive of the new, combined ITV. Though they put on an affable double act for the sake of the press when the tie-up was recently announced, there is no love lost between the two of them. Allen has never relished the prospect of Green being his chairman, especially when the founder of Carlton announced he would be an executive chairman and did not plan to retire until he was 80.

It was more than symbolic that the final knife in Green's back was stuck there by the Granada board. As unhappy shareholders ganged up against him, Green was counting on Granada to come out unanimously in his favour and see off the rebel institutional investors. But when the board met on Monday night it caved in to shareholder pressure, concluding - much to Carlton's surprise since Green and Allen getting the top two jobs was meant to be part of the merger deal - that ITV plc needed a nonexecutive chairman independent of either Granada or Carlton.

Now Allen will have a chairman without a TV background - investment banker John Nelson and ex-Lloyds TSB chairman Sir Brian Pitman are two names in the frame - leaving the man from Granada to get on with running the company. No doubt bon viveur Allen has already opened one of his best vintage wines behind the privacy of his swanky Notting Hill home to toast the prospect. I expect to drink very well when we meet for lunch next week.

There had been talk that Allen might get the chop as well: some shareholders were gunning for him, too. But I have it on good authority that Anthony Bolton, the fund manager of Fidelity who represented 36 per cent of Carlton shareholders and 33 per cent of Granada's, will settle for Green's scalp.

Besides, ITV plc will need accountant Allen's cost-cutting skills, at least in the early days. The merger is supposed to produce cost savings of around [pounds sterling]50 million, but Allen, who was a dab hand at portion control when Granada was also a catering company, is capable of producing up to double that.

Already London Network News, which provides local newscasts for Carlton and Granada, is to be junked in favour of ITN, in which ITV plc is the biggest shareholder (and could soon own it all). Whether he has the vision to preside over the reinvigoration of ITV as Britain's premier commercial network is something the shareholders can decide over the next year or so.

The job of investors like Fidelity's Bolton is to maximise shareholder value, something which has been in short supply at ITV; if a leaner, more profitable ITV emerged from Allen's cost-cutting it would attract a bigger bid from an American media giant like Viacom.

Green never really recovered from the shambles of ITV Digital, which was his baby. I remember hosting a dinner for him around the time of its launch.

Stanley Kalms of Dixons and Martin Sorrell of WPP, the global ad agency, were also there.

I warned him that Rupert Murdoch's BSkyB was too tough a nut for him to crack - Murdoch would see ITV Digital off by giving away Sky's new digital boxes (which he did). Sorrell said the marketing plan was all wrong. Kalms said the technology was faulty: when he tried to change channels on ITV Digital his loo flushed.

When the person who presided over the launch of Sky, the head of one of the world's biggest ad agencies and Britain's biggest electronic retailer tell you an expensive new TV venture is fatally flawed, it might be sensible to take notice. But Green rode roughshod over our concerns. That is his style.

After [pounds sterling]1 billion of shareholders' money had gone down the drain, Green's investors had had enough. …

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