Media Forum: Should RTL ditch five for ITV?

Would an RTL bid for ITV be good for television? Alasdair Reid reports.

Michael Grade, the executive chairman of ITV, has stated that he wants to step back from day-to-day control of the network within the next couple of years - and many have assumed that Dawn Airey was favourite, by one route or another, to succeed him in the chief executive part of his role.

That theory remains just about intact, despite the fact that last week's "Dawn raid" involved Airey ousting not Grade but another chief executive entirely - Jane Lighting, over at five.

This seems a backward step - after all, Airey was the chief executive of five between 2000 and 2003. Airey famously doesn't take backward steps - leading many to speculate that she has in reality jumped ship to lead a bid by five's parent company, RTL, for ITV.

The supposition is that RTL will offer five to BSkyB in exchange for Sky's 17.9 per cent stake in ITV - a stake that the Competition Commission has ordered Sky to sell, but which is currently worth scores of millions less than Sky paid for it.

Both sides will therefore be happy. Sky has always wanted a foothold in terrestrial broadcasting and RTL has vowed to be top commercial broadcaster in all its markets across Europe.

Granted, there are one or two difficulties with this theory. Airey could be on enforced gardening leave for a whole year, for instance. And then there's the fact that RTL is thought to be strapped for cash. There might also be new Competition Commission issues relating to the scenario outlined above. And, with the analogue switch-off looming large, the notion of a terrestrial television channel becomes less relevant by the month.

But humour us. Would it be in advertisers' interests to see RTL ditching five and Airey gaining control at ITV?

Andy Jones, the chief executive of Universal McCann, says his gut reaction is to say no, but his head tells him he should be prepared to keep an open mind.

He adds: "My initial reaction would be that this is not what I'd want to see. There would be all sorts of competition issues - I don't think anyone would like to see a five-ITV combination, and a five-BSkyB combination would be a major worry too.

"There's already too great a degree of concentration of ownership in television. I also think we should be prepared to give more credit to Michael Grade and what he has achieved at ITV. On the other hand, new investment is always a welcome proposition."

Chris Hayward, the head of investment at ZenithOptimedia, is even less convinced. He argues that any changes to the ownership of five and ITV could further erode the "Britishness" of both. He explains: "We need a balance and variety in commercial television - and it's interesting looking across the schedules to see how much Boston Legal- and CSI-type American programming there is. I don't think we'd want more of that."

Exactly, Neil Johnston, the head of TV at OMD UK, agrees. He says: "Five has focused on international programming formats like CSI, and though it has developed a good-sized audience, it has a poor (demographic) profile. People always tend to talk up RTL, but it has been in this market for a decade and it hasn't really appeared interested in consolidating its position. I'm not convinced it could bring anything to ITV."

It's true, Marc Mendoza, the managing partner at MPG, says: advertisers are only interested in one thing. He concludes: "They really don't care about share price issues or ownerships or (who's who) in the regime.

"Airey has always been pretty highly regarded by advertisers - it's certainly a name they know. My own personal feeling is that if you looked at her CV details without being told whose they were, you might feel that this person wasn't a stayer. That would be the main worry. But the truth is that advertisers are interested only in whether ITV or five has programmes that deliver viewers."

- Got a view? E-mail us at campaign@haymarket.com

MAYBE - Andy Jones, chief executive, Universal McCann

"My instinct is to say no. But, on the other hand, I also have to recognise that if there are serious players prepared to invest in the market leader in UK commercial television, then, at some level, that has to be a good thing."

NO - Chris Hayward, head of investment, ZenithOptimedia

"The great thing about ITV is that it does what it does while still being British in flavour. I would worry that if a company like RTL came in, much of that Britishness would be eroded."

NO - Neil Johnston, head of TV, OMD UK

"If you compare what RTL has done with five and what the current ITV management has done, then ITV has done better. RTL has been in this market over a decade and I'm not sure it has ever shown true ambition."

MAYBE - Marc Mendoza, managing partner, MPG

"If RTL were to come in and invest in programming, then it would be fantastic for advertisers, but it's a big 'if'. As I understand it, even if RTL were in a position to make a bid for ITV, it wouldn't (subsequently) be in a position to make major investments in programming."

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