ITV’s consolidation into three power bases neared completion last
week when United News and Media completed its acquisition of the Wales
and West of England broadcaster, HTV.
Lord Hollick, the chief executive of United, has reached an agreed
pounds 372 million bid for the broadcaster in a deal that values HTV at
40 times its 1996 earnings, way above the 30-times earnings more usual
in the broadcast arena.
United already owned almost 30 per cent of HTV after making an initial
assault at the end of last year, when it snapped up a 20 per cent stake
from the Scottish broadcaster, STV.
United’s swoop comes a week after Granada launched its bid for Yorkshire
Tyne-Tees, in which United has a 15 per cent stake. The price paid by
United for HTV is said to have put further pressure on Granada to up its
offer for YTT from pounds 711 million - 32 times earnings.
The offer met with instant disapproval from large investment groups.
According to Bill Barker, the broadcast director of J. Walter Thompson,
the multiple HTV is paying ’means the company will have to radically
reduce costs and that suggests that there’s not much to be gained by the
viewer from this. The only way ITV can contain its revenue erosion is to
contain its audience erosion and strong regional stations will be
The recent ownership changes are, however, unlikely to affect airtime
sales. YTT is already sold by Granada’s sales house, Laser Sales, while
HTV is sold by United’s sales operation, TSMS.