ITV should be one company, says Robinson

Click to follow
The Independent Online
The nine ITV companies will need to merge into a single operating group within a decade, according to Gerry Robinson, chairman of Granada Group, the leisure and media company which is seeking to dominate Channel 3 broadcasting.

After a week of talks and mergers in the television industry, Mr Robinson said yesterday he believed one company would, within 10 years, control ITV in order to compete with the increasingly cut-throat television market.

He added: "If ITV were started now it would look a ludicrous and costly structure to compete with Sky, Channel 4 and Channel 5."

He added that the Government had so far taken a "freer, more logical stance on media ownership". Mr Robinson, who is a firm Labour supporter, said the new Government had taken a very sensible attitude towards relaxing current legislation, which prevents companies owning more than 15 per cent of the UK's total television audience.

However, a spokesman for the Department of National Heritage, poured cold water on Mr Robinson's comments, and said: "There is no immediate imperative to change the current media ownership regulations. It's hard to see how a single licence holder could deliver diversity."

Charles Allen, Granada's chief executive, backed Mr Robinson's claims that the UK needed to foster a "strong, vibrant" television industry controlled by sizeable players. He said ITV should mirror the structure of Channel 5, with major operators taking stakes in a single holding company.

City analysts had mixed views about Granada's views. Anthony de Larrinaga, media analyst at Panmure Gordon, said: "I'm sure Michael Green [chairman of Carlton Communications] thinks the same thing and wants to be boss as well. If the Independent Television Commission wanted one commercial mainstream licence it would have created it. But the ITC hasn't decided to abandon the regional structure of Channel 3."

However, Mathew Horsman, media analyst at Henderson Crosthwaite, said "at some point down the road" there would be an "ITV plc". He added: "The inability of the franchises to work together has held ITV back. At some point there will be a single proposition to compete against the national Channel 4 and Channel 5 franchises." Mr Horsman added that the restructuring and appointment of a chief executive at ITV Network Centre signalled the first steps towards a single Channel 3 company.

Granada's comments come a few days after it announced it was in talks with its neighbouring franchise, Yorkshire-Tyne Tees Television. Sources said yesterday that Granada would want to save around pounds 20m over two years if the deal with Yorkshire went ahead. The majority of Yorkshire's production facilities would remain at Leeds, according to Mr Robinson.

His enthusiasm for further integration followed swiftly on the heels of Tuesday's pounds 105m merger of Scottish Television and Grampian Television. One analyst suggested that Mr Robinson and Gus Macdonald, chairman of Scottish Media Group and also a Labour supporter, had proceeded with merger talks only after "sounding out" the Government's views on further consolidation.

Unveiling a 33 per cent rise in profits before tax and exceptional items to pounds 243m for the 26 weeks to the end of March, Mr Robinson said the company would invest pounds 200m in TV channels and programming in the next five years. Analysts said Granada was attempting to signal to the stock market that it was not achieving the rating it deserved considering the size of its media holdings.

Mr Robinson kept his options open on a demerger of the group's media operations. He said that while Granada would not be spinning off its media division in the short term, the company would always keep it in mind as a possibility.

Granada saw operating profits on last year's Forte acquisition soar 351 per cent, from pounds 25.8m to pounds 116.4m.

Comment, page 25