Outlook: Robinson takes a step nearer his goal
Wednesday 24 March 1999
As the ITV franchise-holders whittle down through takeover and merger into fewer and fewer players, the question remains - who will eventually emerge as top dog? Mr Robinson thinks that in the end there will be only one, and he's determined that even if Granada doesn't own it outright, it will certainly be the dominant partner. For that title, however, he has still to fight it out with Lord Hollick's United News and Media and Michael Green's Carlton.
The acquisition of Mirror Group's 18.6 per cent stake in Scottish Media, owner of the Scottish and Grampian franchises, brings Granada a staging post closer to its goal. For the time being, the rules seem to stop Granada from going any further. The last reform of the broadcasting legislation allows companies to own as many franchises as they like, provided they keep within 15 per cent of commercial television viewing. Separate competition rules prevent companies acquiring more than 25 per cent of ITV advertising. If Granada were to buy Scottish outright, both these ceilings might be breached. The company claims not; the industry disagrees.
What is not in doubt is that United and Carlton would suffer no such barrier. Certainly United, and possibly Carlton too, would be within the 15 per cent ceiling, and given that United already undertakes advertising sales for Scottish, that wouldn't have presented a problem either.
So Granada's move has to be seen as both defensive and offensive. Mr Robinson has bought the stake partly to stop others from doing it, but also against the day when either the rules change or the advance of multi- channel TV reduces his share of viewing sufficiently below the 15 per cent ceiling to enable outright takeover.
Perhaps the most intriguing question is why neither United nor Carlton tried to outbid him for the stake. The answer to this is that they might have tried to (or at least one of them did), but they wanted to mop up Flextech's similarly sized shareholding at the same time so that the combined stake could be used as a launching pad for a bid. This proved complex and difficult, so Mirror instead opted for the clean-break, no-strings offer from Granada.
For Scottish, then, Granada possibly offers a kind of salvation. Even so, it would do well to remember the line from the movie Highlander - "there can only be one" - and the fact that as far as ITV franchise-holding is concerned, it was Mr Robinson who was the first to use it.
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