TV shares will be hit

By Daily Mail City Reporter

THE shake-up of the ITV companies will lop millions off the shares of the TV companies today.

One broker said last night: "They have been hit by a sledgehammer."

TWW, which has lost its contract, will continue as a company but it will be worst hit. It has several other interests, notably Dolland and Aitchison, the ophthalmic opticians, and the Piccadilly Theatre, London.

It's shares are expected to fall by up to 10s. today from 27s. on Friday.

The big four companies' profits will be hit. Estimates are that those of ATV Network, Granada and Rediffusion for 1968-69 will drop 30-40 p.c. on 1965-66. ABC TV's may fall 20 p.c. Its shares are expected to drop by several shillings today.

But each company should be cushioned. ATV Network is a subsidiary of ATV, which has interests in records and toys; Granada is a subsidiary of a group which includes TV Rentals; ABC of the film corporation; and Rediffusion's main shareholders are British Electronic Traction, which owns bus companies, and the piped TV organisation.

TWW has reaped successful profits in the eight years since it was granted a licence in 1958 to the end of 1966 - a total of just over GBP6 million after tax.

The authorised share capital comprises 52,050 founder shares of GBP1 each (all of which have been issues fully paid) and 7,583,600 non-voting Ordinary shares of 2s. 6d each (5,781,594 have been issued and fully paid).

The share capital is GBP744,749 5s. The total capital, including revenue reserves, is GBP3,721,566.

The Daily Mail is the third biggest-selling British newspaper, outselling all newspapers except for two of the three red tops (the Sun and the Mirror).

The Daily Mail's owner, Associated Newspapers, were the 'Associated' in Associated-Rediffusion from 1955 until 1957, and were 37.5 per cent owners of Southern from 1959 until its demise in 1981. They currently part-own Teletext UK Limited, which provides the main teletext service on ITV and C4/S4C.

You can find out more about today's Daily Mail at www.dailymail.co.uk

Again we see a newspaper being upbeat about the future for TWW, going as far as to list the financial data to support its belief that the company will survive. On the face of it, the figures do look good, but the loss of the contract hit TWW hard, and its days as an operating company were numbered, as it became first a holding company for its diversifications, then later disappeared altogether when the group split up.

Whereas the Telegraph had thought Granada unaffected by the ITA's changes, the Mail is less certain, obviously thinking that losing at third of its region meant a drop of a third or more in profits. In reality, Granada did better without the rental of two transmitters and the barrier of the Pennines causing huge expense for the transfer of news and other local programmes. The addition of the weekend hours also helped improve matters.

The drop in profits for ATV Network was something that ATV itself testily noted in its annual report for shareholders in 1969, although the drop was not a third thanks to the continuing 'boom years' for ITV as a whole.

The paper's contention that the Thames deal would be worse on Rediffusion than ABC proved correct, although not necessarily from a financial point of view. Thames was extraordinarily successful, after a rocky start due to the cost of implementing colour, and both Rediffusion and ABC were able to laugh all the way to the bank. Rediffusion did less well in the boardroom politics of Thames, where its 49% was useless in the face of the ABC 51% holding, finding itself with no room for manoeuvre and no prospect of having a say in the new station's affairs.

By the next franchise round (not to follow until 1981, after a 'roll-over' in 1974), the City would be prepared for the worst (and best) when the new contracts were announced. This article reflects the shock in the City as this, the first ever reorganisation, resulted in an unpredictable new playing field. The City's conviction (along with everybody else except the ITA) was that, once in place, the companies were there forever. In reality the companies were there as long as the regulator said so!