Grade plans to streamline ITV regional structure

In recent times ITV has evolved from 15 separate franchises down to a handful of companies: ITV plc for England and Wales, STV for Scotland, UTV for Northern Ireland plus Channel for the Channel Islands as well as GMTV for a nationwide breakfast TV service. But all the old regional English franchises still technically exist as separate contracts renewed at regular intervals.

Unless the Government suddenly gets the desire to hold another ITV franchise auction (which technically could still happen, though a 'single English ITV' is now an unwritten Government policy), ITV plc now has the English franchises for keeps or until it gets bored with paying for separate licences and decides to go it alone after digital switchover (which could happen).

But keeping an overhead of many regional outposts - even if they have been dramatically scaled back with most of them hardly producing anything worthy of note apart from news bulletins - is an expensive proposition for a single company. ITV plc was prepared to tolerate a degree of overhead just for the privileged position of being England and Wales's third channel.

So redrawing the old franchise boundaries and changing the contracts to suit (presumably with terms that now favour ITV plc) has now become a very attractive proposition. However there is another highly compelling reason why ITV plc has decided to embark on such an ambitious restructuring of the franchise structure: notably that of contract rights renewal.

Contract rights renewal - or CRR for short - was the agreement drawn up in order to allow Granada to merge with Carlton in order to create that much-desired single ITV company for England and Wales. Put simply, CRR linked the price charged for advertising with ITV plc's audience share, but as the audience declined so did the advertising rates in tandem.

This state of affairs pleased the advertisers but has hit ITV plc hard financially, and two previous attempts to get CRR revoked had both been rejected. Therefore it isn't much of a surprise that ITV plc is now trying to have the basic franchise structure changed to suit its own means as well as rendering CRR obsolete in the process. (Well that appears to be the plan anyway.)

Whether you agree or disagree with the principle of a single ITV franchise for England, the whole of the old ITV franchise system really needs to be overhauled sooner rather than later, thereby removing any pretense of automatically renewing 'phantom franchises' just to keep a notional single English regional ITV franchise intact.

It makes sense to clarify ITV plc's public service obligations at this point of time (being so close to the point of digital switchover) as well as perhaps forcing ITV to strengthen regional news (for example) in exchange for some concessions elsewhere within the regional structure.

Also ITV is now pursuing local news using its ITV Local initiative, which is a method of providing very local news coverage on a place-by-place basis at minimal cost using online access, although the audience for these online news clips could remain equally minimal if ITV plc doesn't give them the promotion that they require.

Out of the existing ITV regions, ITV West (the ex-HTV West area) appears to be a dead cert for pairing with another region (such as Westcountry or perhaps Meridian) due to its size and location, and Border could end up being joined with Tyne Tees since they are both smaller regions that are geographically adjacent as well as having tenuous cultural links with each other.

The rest is within the realms of pure speculation, although one or more of the smaller regions could be better off being paired with an existing 'major' from a geographic perspective - eg. Anglia with Central - as opposed to joining regions that aren't adjacent with each other, although Meridian was effectively paired with Anglia and HTV during the United News and Media era.

Whatever the eventual outcome, any clarification of ITV plc's franchise commitments will be long overdue and in theory ought to have been done years ago. Michael Grade ought to still bear in mind the role that is still played by regional identity, even though most of the ITV audience probably wouldn't notice if their ITV region technically disappeared overnight.