ITV headhunters spread their net as Allen agrees to go next month

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The Independent Online

ITV's search for a new chief executive will consider candidates from outside the media industry, the company revealed as it announced that Charles Allen will depart sooner than expected.

Mr Allen will quit at the end of September and John Cresswell, the finance director, will take over as chief executive until a permanent replacement is found. It had been thought that Mr Allen would stay on until the end of the year but using Mr Cresswell as a stop-gap means he does not need to remain in the job until a permanent replacement is found.

But analysts warned that without a permanent chief executive, ITV was all the more vulnerable to takeover bids from private-equity houses. Several predators are known to be circling.

Sir Peter Burt, ITV's chairman, said the new chief executive did not need to come from a programme-making background or even from the media. "The best candidate could come from the media sector or be a businessman from another area. It is very difficult to say at this stage," he said.

That opens up the field of candidates enormously, potentially to anyone with big company experience. The speculation on a successor had so far focused on those with a television background, such as BSkyB's director of programming Dawn Airey, or those with at least some media experience, such as the ITV non-executive director Mike Clasper.

Sir Peter said ITV's poor performance in attracting viewers and advertising revenues had led to Mr Allen's downfall. He said the problem was compounded by a regulatory mechanism, known as Contract Rights Renewal [CRR], which ties loss of viewers to a consequent loss of advertising money.

"Had the programming been good, the advertising downturn would not have hurt so much. It has produced a very painful wound," Sir Peter said.

He denied that investor pressure had directly led to Mr Allen's exit but acknowledged that ITV's biggest shareholder, Fidelity, was "not terribly happy" earlier this year. Fidelity, which has a 14 per cent shareholding that is showing a heavy loss, has long been gunning to remove Mr Allen.

Mr Allen said yesterday: "The role of the chief executive is to take the bullets in the creative community when it doesn't go well and step out of the light when things go well. That's how you get people to take risks and this game is all about taking risks. You never get it right all the time. The lesson I've learned in 15 years in television is that that's my job as chief executive - to ensure that we encourage people to take as many risks as possible. When it doesn't go well it's down to you, when it does go well it's down to them."

ITV's viewing figures over the summer have been disastrous, with both the World Cup and Love Island failing to excite the public. Audience share has come down to 16 per cent in some weeks. That has led to double-digit declines in ad revenues.

City and media sources said Mr Allen's position was further undermined by two other factors. First, the company turned down a bid at 130p in March, only to see the share price sink to about 100p in recent weeks. Second, one of the company's top priorities is to convince regulators to remove CRR but that task was tricky for Mr Allen as he came up with the idea, in order to get the merger of Granada and Carlton through in 2003.

Mr Allen, 49, has been chief executive of ITV and its predecessor company Granada for 10 years. He steered Granada and Carlton through a difficult merger to form a single ITV company. He is credited with pulling off a remarkable series of concessions from regulators and cutting costs. Under him, ITV has launched three new channels for digital television. However, he has not been able to tackle ITV's on-screen problems, with the broadcaster being criticised for a profound lack of creativity and confidence in its programming.

Mr Allen's departure will be cushioned with a pay-off package worth about £3m. He is the vice-chairman of the London 2012 Olympics and it is thought that his role in organising the Games could increasingly occupy him in future.

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