Tough road ahead to revive a battered broadcaster

What will be in Michael Grade's in-tray?

Cheered to the rafters as he strode into ITV's Gray's Inn Road HQ yesterday, Grade is already in credit, having raised the spirits of a staff beleaguered by half a decade of decline.

Unquestionably, his No 1 priority is to strengthen the quality of programming, particularly on the flagship channel ITV1. Everything else is of secondary importance.

Advertising revenues will return as the content improves. Beyond that he must find a way of connecting ITV to the wider broadcasting world beyond digital television. It has yet to broadcast a downloadable programme and is far behind the BBC and Channel 4 in recognising the potential of new media. He must also look to provide a period of corporate stability, after a succession of attempted takeovers.

How will ITV's programming be affected?

Though Grade is a former director of programmes at LWT (where his record was mixed) and presided over a golden era as chief executive of Channel 4, he will need a creative guru to transform the ITV1 schedule.

Top of his wish list must be Kevin Lygo, C4's director of programmes, who was linked with an ITV takeover package headed by the former BBC director-general Greg Dyke. Lygo has brought such hit shows as Wife Swap and Jamie's Kitchen to C4, along with imports such as Desperate Housewives. But any new incumbent would also want to capture the cross-generational appeal of the hits that have buoyed up BBC1, such as Dr Who and Strictly Come Dancing. Simon Shaps, ITV's director of television, is likely to part company with the network, though some of Shaps's more inspired appointments, such as the drama chief Laura Mackie and entertainment head Paul Jackson, would be seen as assets. Whatever team is assembled, it will need to develop programmes with relevance to the key 18- to 35 year-old demographic.

How will Grade work with Rupert Murdoch?

Naturally, Grade moved quickly to say that BSkyB (which has just bought 17.9 per cent of ITV) would be treated like any other shareholder. But he and Rupert Murdoch have history. In his autobiography, Grade empathises with Murdoch, saying the pair are "both outsiders, patronized and resented by the establishment".

Elsewhere in the book he refers to him as a "devil" and a "monster".

He writes: "It is a scandal that a foreigner has been able to amass so much media real estate in Britain without any real challenge.

"He's like Moses crossing the Red Sea: the waves always mysteriously part to allow him through."

In 1995, when the Government invited bids for the new Channel 5, Grade, then chief executive of Channel 4, was the cheerleader of the anti-Murdoch brigade.

Ironically, there is a real possibility that Murdoch could yet take control of Five if its owner RTL decided to trade the channel for BSkyB's new shareholding in ITV.

Where does this leave Sir Richard Branson?

Having been snubbed by the previous ITV chairman Sir Peter Burt, Sir Richard was quick out of the blocks yesterday to welcome Grade as a "delightful person with a long-standing reputation in the industry".

This does not mean that NTL, of which Sir Richard is the chief shareholder, will make another bid for ITV, but the chances have increased.

Nothing is imminent though, and Branson is still hoping that the Office of Fair Trading will order BSkyB to offload its stake, which currently wards off potential takeovers.

How damaged is the BBC?

The biggest threat to the BBC will come in the ratings war, assuming that Grade is able to re-energise Britain's biggest commercial broadcaster.

On top of that there is the loss of face resulting from the chairman decamping to the BBC's fiercest rival. The timing of Grade's departure, just before the announcement of the BBC's new licence fee, is also unfortunate.

However, those wranglings are pretty much over. The BBC has already reduced its demands from 2.3 per cent above inflation to 1.8 per cent.

Mark Thompson, the director-general, has taken the lead in the negotiations and Grade staying for a further four weeks would not have greatly improved the settlement the BBC receives.