Granada plans to focus on TV ventures

Granada, the media and leisure company, is to rebrand its television arm and seek international partners to expand in Asia, America and on the Continent, writes Mathew Horsman.

A potential partner world-wide is Rupert Murdoch's BSkyB, the satellite broadcaster, with which Granada has already set up a joint venture to launch five new satellite channels in the UK.

The renewed emphasis on broadcasting follows the pounds 3.8bn acquisition earlier this year of Forte, the hotels and restaurants company, which has consumed management attention since last autumn.

The company is currently looking at several possible names for the new television subsidiary, including Granada Broadcasting System (GBS).

A new chief executive of the television arm is expected to be named within weeks. A shortlist of two candidates is currently being reviewed internally, and it is expected that Duncan Lewis, formerly chief executive of Mercury Communications, the telephone company, will be named to the position.

Granada, which operates ITV licences Granada and LWT, also holds 25 per cent of Yorkshire-Tyne Tees, the ITV franchise holder, and is a large supplier of programming for the ITV network. It earned profits of pounds 140m last year from its television operations.

Charles Allen, chief executive-designate of the company, said in an exclusive interview that "television is clearly a priority for us now. It's inherently a good business and highly cash-generative".

He added that the joint venture with BSkyB was a natural route for expansion. "They are very knowledgeable about pay-TV, and have the expertise to set up new channels."

Expansion in Asia, the US and the Continent is likely to follow the model of the joint venture with BSkyB. "We are looking to have alliances in major markets," Mr Allen said. "We are currently preparing to tell our story to potential partners, to prove that we are a pretty girl after all."

Mr Allen said the move into pay-TV did not imply a dissatisfaction with the core commercial TV market. "These are two separate markets, and we believe they should be considered separately," he said.

"Only commercial television can deliver mass audiences, while cable and satellite can address narrow markets."