Yorkshire-Tyne Tees denies plan to split franchises in two: Troubled ITV group rejects Square Mile speculation

YORKSHIRE-Tyne Tees Television, the troubled ITV group, is considering splitting itself back into its two constituent franchises, according to senior sources.

The suggestion, which has gained strong currency within both YTTV and the City and would reverse last year's merger, was strongly denied by Ward Thomas, the group's chairman.

The speculation followed the decision by the Department of National Heritage to allow companies to own a maximium of two ITV franchises, regardless of size. This in effect rules out any bid for a merged YTTV.

Most in the industry had expected the rule change to allow any company to own three franchises - two large and one small. LWT, which has the London weekend licence, bought a 14 per cent stake in YTTV and was expected to launch a full bid if the rules allowed.

YTTV faces a difficult period as an independent company following the debacle that led to its sales side selling pounds 15m more advertising airtime than it could deliver and forced the resignation of Clive Leach, YTTV's chairman and chief executive. It has emerged that some popular slots in next year's schedule were sold three times over.

YTTV had offered to resolve the problem by refunding the upfront payments, but this was rejected by the media-buying agencies. A deal is likely to be struck with YTTV giving the advertisers free airtime over nine months to clear the backlog.

Pessimism about YTTV's future has forced the shares down. They fell 16p to 178p yesterday, after a 17p decline on Wednesday.

Geoff Brownlee, YTTV's director of corporate affairs, said the possibility of splitting the group up had not been considered by Mr Thomas, or any of the three-strong executive committee.

Mr Brownlee pointed out that splitting the two franchises would be extremely difficult given the pounds 11m of savings achieved by the group following the merger. The two companies would also have to share jointly owned facilities, such as the new Cleveland newsroom.

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