The structural challenge facing ITV is well enough known. That its audience is in freefall in the face of an apparent inability to produce hit programmes is also well chronicled.
But now it seems that it is not even capable of running a smooth process to appoint a new chief executive, after the ousting of Charles Allen in August. Its chairman, Sir Peter Burt, wants out. And yesterday, ITV's own broker, the mighty UBS, downgraded the company's shares.
While the process to appoint a new chief executive drags on, amid candidates ruling themselves out for the job, bidders are preparing to strike. According to City and industry sources, there are at least four predators out there.
They might well take advantage of the leadership hiatus to strike or, others suggest, wait to see the reaction to the new chief executive. If shareholders are not convinced by the appointment, they would be much more willing to accept any offer that is made.
So the appointment is crucial to ITV's continuation as a public company and, of course, it is central to whether the broadcaster can be rescued from its precipitous decline. The new chief executive needs to come up with a compelling strategy, to halt that decline, and produce some sort of growth story.
Last week, one of the last remaining touted candidates for the job, Mike Clasper, an ITV non-executive director and former chief executive of the airports group BAA, said that he had not "thrown my hat into the ring".
That just set off more speculation as Mr Clasper was known to be interested in the job and it was thought that Sir Peter was keen on him. In the City, punters were so sure that he had it in the bag that the odds on him were "evens", and a number of hedge funds were short-selling the stock - on the basis that he would not go down well and the shares would plummet once the appointment was announced.
Some suggested that other board members - Sir George Russell and Sir Brian Pitman reportedly - had stepped in to block Mr Clasper.
If that is true, then ITV has an almighty boardroom rift, with some board directors wanting a chief executive from a creative background and others after a corporate/business type such as Mr Clasper. Shareholders are becoming concerned about the length of time an appointment is taking.
Adding further to the sense of management crisis at ITV is the view that Sir Peter Burt wants to quit after installing a new chief executive. There are even rumours that Sir Peter would go first.
Some ITV insiders insist that these stories are media fabrication and speculation. And they say that the selection process for the chief executive post is on track. One says that the board has been working much better since bowing to shareholder pressure to ditch Charles Allen as the chief executive.
"Charles leaving has been cathartic for the ITV board. They are more focused on managing the business," a senior source said. "Mike Clasper was never an outstanding candidate. He would not even have made a long list if he had not been on the ITV board."
With Mr Clasper not in the running, the field of obvious candidates is small. Andy Duncan, the chief executive of Channel 4, and Tony Ball, the former chief executive of BSkyB, are among those who have already let it be known that they are not interested. Dawn Airey, Sky's head of programming, is doubtful.
So that could leave just one serious contender, Stephen Carter, who has just left the top job at the media regulator, Ofcom. Even if it is just a short-list consisting of one candidate, Mr Carter is still highly rated in the City and his appointment would be welcomed.
Mr Carter, the first chief executive of Ofcom, previously ran the cable television group NTL and the advertising agency JWT.
Paul Richards, an analyst at Numis Securities, says: "If Carter gets it, that would be a good result. He knows all about regulation, convergence, and he has a creative background. But it would be encouraging to see some progress [in the selection process]. We don't want to see it drag on till after Christmas."
It is understood that no candidate has been formally interviewed for the ITV job. According to some, candidates have not even been contacted.
One of the most pressing issues for any new chief executive is to convince regulators to remove a mechanism known as Contract Rights Renewal (CRR). This punishes ITV for the loss of viewing share, with a proportionate loss of advertising revenue.
City analysts' longer-term forecasts are based on CRR being removed by the end of 2007. The new chief executive must deliver that. It is reckoned to be worth some £100m to the bottom line at ITV. CRR is also blamed for dragging down the whole advertising market, as ITV is the biggest single pricing barometer. But advertisers will resist giving up a tool that has acted as a deflationary mechanism for them, so CRR will be a tough battle.
As the former media regulator, Mr Carter understands CRR backwards. But that is also his biggest problem - Ofcom will not want to be seen to be doing its former boss any improper favours. However, this objection overlooks the fact that the removal of CRR lies primarily with another regulator, the Office of Fair Trading, with Ofcom acting in more of an advisory role.
UBS yesterday cut its earnings forecast for the company by 8 per cent for this year and a hefty 16 per cent for 2007. The broker dropped its recommendation on the stock from "buy" to "neutral", and its share-price target was pared back from 135p to 105p - not much above the closing price yesterday of 100.25p.
The programming challenge for the next chief executive of ITV is clear. The main ITV1 channel continues to lose audience at an alarming rate, with the station having just gone through a disastrous summer - the World Cup failed to excite advertisers, while programmes such as Love Island flopped. Advertising revenues will be down by a painful 12 per cent for the second half of this year.
Fix the programming and the advertising will follow, the theory goes. But even if this is pulled off, it will just slow the rate of audience decline. The spread of digital television means that ITV1's share of the audience will inevitably continue to get smaller in homes with a choice of dozens of channels.
The new chief executive will therefore need to come up with a whole new business that will provide the growth.
One television executive says: "They need something that plays off the strength of ITV1, which is the best marketing tool in the country. That could come by diversifying the company's activities. The ITV business is changing. It is not such a creative challenge any more."
Whether the new ITV chief executive is a creative or business mind, he/she will need to impress shareholders and viewers, and magic up a whole new strategy. Wimps need not apply.Reuse content