United may axe 100 jobs in TV revamp
Thursday 28 August 1997
In the wake of the pounds 372m acquisition of HTV in June, United has kicked off a cost-cutting drive across the group's television portfolio, which also includes the Anglia and Meridian franchises.
A spokesman for United Broadcasting confirmed the review, but said it was hard to see how many jobs would go at this stage.
However, a source at the company said the group was looking to make 100 people redundant to make savings of pounds 3m.
City analysts said yesterday that United had found HTV was "a tight ship", and had decided to seek cost savings elsewhere in the group. One said: "Costs will be cut more from United's existing television operations than HTV."
Another analyst said that, far from slashing large numbers of jobs from HTV, United would actually use the organisation of HTV as a template for its other franchises. He said: "United is discovering that maybe it will have to adopt the measures HTV had in place in its existing television operations."
United reports its interim results next month, but it is not expected to have finalised the review by then. An announcement about the streamlining is likely to be made in the next two months.
United paid a full price for HTV in order to ensure it maintained its position as one of the biggest players in ITV, along with Carlton Communications and Granada Group. Whereas most recent bids valued television companies at around 30 times earnings, United's 420p-a-share agreed bid was equivalent to around 40 times earnings. Granada, which bought Yorkshire-Tyne Tees Television earlier in the summer, paid pounds 11.75 a share, valuing the company at pounds 711m, or just over 30 times earnings.
At the time of the deal, United said it could save around pounds 10m by amalgamating programme transmission for HTV, Meridian and Anglia. However, job losses were originally expected to be minimal, and Meridian and Anglia had hoped to escape unscathed.
Apart from a 29 per cent stake in the newly launched terrestrial television station, Channel 5, Lord Hollick's group also owns numerous press interests, including the Express newspapers and Miller Freeman, publisher of business magazines.
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