STV ponders its own Scottish empire

Scottish Television is considering plans to create an all-Scottish media empire as a way of retaining its independence in the face of meger mania in the UK television sector, writes Mathew Horsman.

Ultimately, the licence-holder for Central Scotland could bid for Grampian, the ITV franchise in northern Scotland, for Scottish newspapers and for a stake in Scottish Radio. The plan has been discussed with STV's major shareholders, Flextech and Mirror Group, both of which hold 20 per cent of the shares.

It is believed that Flextech would support the sale of Scottish's 20 per cent holding in HTV, the licence-holder for Wales and the West, in order to generate additional cash to launch the all-Scottish expansion. Carlton Communications is tipped as a potential bidder for all of HTV.

Andrew Flanagan, chief executive of STV, said: "Certainly the idea has merit." He added: "The opposition has said its aim is to move toward devolution, so there will be a role to play for Scottish media companies." A Flextech insider said: "You can imagine how powerful an all-Scottish media company could be."

Mr Flanagan said he had received no approaches from potential bidders, although he conceded that the new Broadcasting Bill had generated speculation about the future of STV. He declined to rule out acquisitions south of the border, including a bid for HTV, although the two 20 per cent shareholders are believed to be against any such move.

The news of STV's further Scottish aspirations emerged as the company unveiled sharply higher pre-tax profits for 1995 of pounds 20.2m, up from just pounds 2m a year earlier. The improvements were the result of cost-cutting, higher sales of programmes like the award-winning Taggart series to ITV and other broadcasters and the lack of extraordinary items that had helped depress earnings in 1994.

STV also announced plans yesterday to launch a cable and satellite channel aimed at Scottish expatriates living south of the border. The new television service may be launched in partnership with Flextech, which packages and manages themed channels for cable networks in the UK. The company has also had conversations with BSkyB, the satellite broadcaster 40 per cent- owned by Rupert Murdoch, aimed at securing carriage on the Sky network.

Mr Flanagan also said a new television channel, Glasgow Live, was likely to be announced within weeks, in conjunction with Mirror Group, owner of L!veTV, the London-based cable channel.