Risky business 

28 September 2009 tbs.pm/1102

ITV uncertainty could open doors to takeover bid, says analyst

If you now have a distinct feeling along the lines that “We’ve been here before”, then you are almost certainly correct, because despite the attempts made by Michael Grade to turn round the fortunes of ITV plc it seems that precious little has changed in the world of the UK’s largest commercial television broadcaster.

Grade’s content-led strategy for ITV plc’s planned recovery arguably failed because he put implicit trust in existing staff to deliver fresh ideas for programming, but this didn’t materialise as “fresh thinking” still seemed to be absent within ITV’s own studios. (The Fixer was perhaps the best new ‘idea’ they came up with.)

ITV’s big bankers (Britain’s Got Talent, The X Factor) are not produced by ITV Studios – the same applied to the now axed Primeval and the failure that was Demons – plus there is hardly any sign of ITV producing anything important outside of its legacy productions in the coming months.

So it’s perfectly possible that Grade was ultimately “let down” by the ITV employees of whom he had decided to implicitly trust on the grounds that a wholesale staff clearout would do nothing to improve staff morale or enhance ITV’s ability to come up with new programming ideas.

Indeed a more “hands-on” approach as historically practiced by a certain Lew Grade might have paid greater dividends in the longer term (even with the absence of the accompanying open chequebook), although we did get the worthwhile return of News At Ten. (Of course that in itself hasn’t saved either ITV plc or its reputation.)

Then there was Michael Grade’s major strategic weakness to contend with, namely that of new media. The Friends Reunited fiasco has been well documented but it crucially illustrates the price paid as a consequence of failure, and a recent proposal to charge for certain ITV.com video clips could also backfire spectacularly if misjudged.

BSkyB’s ITV shareholding has also complicated (and perhaps even frustrated) ITV plc’s attempts to find a successor to Michael Grade, as Tony Ball went in and out of contention for the job almost as quickly as the music careers of most reality TV stars.

Combine this with an abject failure to remove contract rights renewal restrictions, the ongoing pensions deficit and an advertising slowdown that will probably outlast the current recession (courtesy of the growth of new media), and it’s still easy to see why ITV isn’t exactly the hot ticket it was or could have been under differing circumstances.

Maybe ITV plc will be taken over now that economic conditions are slowly improving, but it’s still hard to envisage anyone willing to take on either ITV’s top job or the company itself at this moment in time. And the possibility of anyone learning from Grade’s mistakes may be lost amidst the boardroom bustups and accompanying economic turmoil.