ITV plc

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ITV plc
Type Public (LSE: ITV)
Founded 2004
Headquarters London, England, UK
Key people Michael Grade CBE
(Executive Chairman);
John Cresswell
(Chief Operating Officer/CFO)
Industry Media
Products Broadcasting
Revenue £2,082 million (2007)
Operating income £192 million (2007)
Net income £138 million (2007)
Employees circa 6,000 (2007)
Website http://www.itvplc.com/

ITV plc (LSE: ITV) is a British media company that operates 11 of the 15 regional television broadcasters that make up the ITV Network, the oldest and largest commercial terrestrial television network in the United Kingdom. The network, which is currently branded ITV1 by ITV plc, and the independent Channel Television, has vied with the British Broadcasting Corporation's BBC One for the status of the UK's most watched channel since the 1950s (a crown it only lost in 2005).

ITV plc is listed on the London Stock Exchange. It was formed by the merger of Granada plc and Carlton Communications with Granada being valued about at about twice the worth of Carlton. It began trading on 2 February 2004. This was the most recent stage in a long process of mergers between the original ITV regional franchises.

Contents

[edit] History

ITV plc was the result of mergers between the various mergers between the companies of the ITV network that had taken place from 1993 when the ownership rules were relaxed.

Flow diagram displaying consolidation of ITV franchises into ITV plc

The first wave of mergers began with Yorkshire Television acquiring Tyne Tees Television in 1992, forming a parent group called Yorkshire-Tyne Tees Television Holdings.[1] In 1994, Carlton Communications - which had previously already owned a 20% stake in Central Independent Television - acquired the remainder of the company[1] and, thanks to Central's shareholdings, inherited a 20% stake in Meridian Broadcasting. Later the same year, Granada acquired LWT[1] (through a hostile takeover worth in the region of £750 million) and MAI, which controlled Meridian Broadcasting, acquired Anglia Television[1] (with MAI becoming United News & Media, after itself merging with United Newspapers - owners of The Daily Express in 1996).[1] Ownership rules, that previously restricted ownership of ITV licences by one company to two outright, plus 20% in a third, were relaxed, and so Carlton went on to acquire Westcountry Television[1] (later re-branding it Carlton, along with Central), Granada acquired Yorkshire-Tyne Tees Holdings[1] (with the parent group becoming Granada Media, later simply Granada) and United acquired HTV.[1]

The idiosyncrasies and business model of the future ITV plc operation can be found in the way these new conglomerates operated their franchises. Carlton re-branded all of its stations with its own name, creating a single identity across the whole expanse of its territory. By contrast, Granada and United, while keeping the franchisees names, centralised their continuity departments - Granada in Leeds and United in Southampton. All three, however, merged the network production operations of their franchises, creating Carlton Productions, Granada Content and United Productions. This would later be taken several stages further.

By the end of the 1990s, there were three dominating owners of the ITV franchises in England and Wales: Carlton Communications, Granada plc and United News and Media. In 2000, after an aborted merger attempt with Carlton, UNM decided to leave ITV and Granada bought all the UNM stations,[1] but sold HTV to Carlton in order to comply with the permitted audience percentage covered by a single broadcasting interest. It kept the production arm of HTV, however, re-naming it Granada Bristol and moving it out of Bath Road to a new, smaller office in Whiteladies Road (near the BBC). This arm of the company finally closed in 2006, following later rationalisation of ITV's production operations. The last remaining independent ITV franchise in England and Wales, Border Television, had been bought by Capital Group in 2000, and was sold on to Granada in 2001, with Border's radio assets being retained by Capital (now GCap).

In 2004, Granada and Carlton merged, creating a single company for all ITV franchises in England and Wales.[2] One of the consequences of the merger was (according to the company) an over-capacity of studio facilities and production units around the country, which had previously been rivals, but were now all part of the same group. In order to make cost savings, several large regional headquarters, studio sites and programme departments closed and merged. Among the casualties were network production and studio facilities of Tyne Tees in Newcastle upon Tyne, Meridian in Southampton, Carlton in Nottingham and Anglia in Norwich. In all cases, ITV moved the regional franchisee to a new location complete with hi-tech facilities for news production, but with a minimal number of (physically smaller) studios and the loss of many jobs. Tyne Tees' factual department merged with Yorkshire's in Leeds (which has since closed and re-emerged as Shiver Productions); Meridian's factual and sport production moved to London; all network production in Nottingham was re-allocated to London, Manchester or Leeds (and the local Central News studio moved to Birmingham), and Anglia Factual has been reduced to a satellite operation of ITV Productions, primarily producing output for the international market or occasionally third parties in the UK.

Prior to the merger, and despite being rivals within ITV, Granada and Carlton had already been involved in several joint ventures, including the digital terrestrial television operator ITV Digital that went bankrupt in 2002. They also owned the digital channel ITV2, which had launched on December 1998, and 65% of the (re-branded) ITV News Channel, previously owned by ITN and originally launched as the ITN News Channel. As well as consolidating its (now 40%) shareholding in ITN itself, the newly merged company was able to buy the final 35% stake in the ITV News Channel from ITN's original partners NTL in April 2004. In November the same year, and following a frantic last-minute deal with BSkyB to buy its half of the Granada Sky Broadcasting joint venture, they launched the digital channel ITV3, which replaced Granada Plus on satellite and cable. A year later they launched ITV4. However, due to multiplex issues (and the fact that it was losing money) the ITV News Channel controversially had its hours on Freeview reduced, and was finally closed down on 23 December 2005, with its Freeview space was taken over by ITV4 and the CITV Channel, which launched in March 2006.

April 2006 saw the launch of the participation channel ITV Play. Following a series of scandals surrounding participation TV, the dedicated ITV Play channel was closed down in March 2007, followed by the late-night phone-in quiz shows on the ITV Network in December 2007, however the brand has continued to be used for part of the new gaming section of itv.com.

[edit] Operations

ITV plc is divided into three divisions: Television, Channels & Online, which operates the TV networks (including the ITV News Group, which runs the ITV regional franchises), itv.com and Friends Reunited; Global Content, which is comprised of ITV Productions, the network production division (of which Granada is an on screen brand name when producing for other networks) which also runs ITV's facilities businesses, and ITV Global Entertainment, the arm which exploits programme rights, and Commercial, which runs ITV advertising sales arm and has responsibility in ITV plc shareholdings in Freeview and SDN.

[edit] Assets

[edit] ITV franchises

ITV plc currently owns the following ITV franchises in the UK:

Former Granada-owned franchises:

Former Carlton-owned franchises:

Note that ITV Thames Valley is not a franchise but a combined opt-out for parts of the Central and Meridian franchises. Similarly, both Carlton Television and London Weekend Television are now exclusively known as ITV London although both still remain in legal existence. The combined Wales and West franchise also appears to operate as two separate entities (ITV Wales, ITV West), although legally they both form part of the single franchise held by HTV Group.

ITV plc also owns 75% of the ITV national breakfast television franchise GMTV.

[edit] Wholly owned digital channels

[edit] Other assets

ITV plc owned a 16.9% shareholding in STV Group plc, owner of the Scottish and Grampian ITV franchises, which was reduced to around 5.5% following a Rights Issue that ITV did not take up, as well as a 40% stake in its news provider Independent Television News Limited.

On 27 April 2005 ITV plc bought SDN, the digital terrestrial franchise holder of Multiplex A (currently transmitting ten channels) from its shareholders, S4C and UBM for £134 million.

ITV plc also owns the largest cinema advertising business in the UK and Ireland, Carlton Screen Advertising and recently bought Friends Reunited, a website dedicated to reunited former school friends or work colleagues in a number of countries.

ITV plc is also the co-founder of Freesat alongside the BBC.

[edit] Future

ITV plc has been the subject of a flurry of rumoured take-over and merger bids since it was formed. For example, on 2006-11-09, NTL announced that it had approached ITV plc about a proposed merger [3][4]. The merger was effectively blocked by BSkyB on 2006-11-17 when it controversially bought a 17.9% stake in ITV plc for £940 million [5], a move that attracted anger from NTL shareholder Richard Branson[6] and an investigation from media and telecoms regulator Ofcom[7]. On 2006-12-06, NTL announced that it had complained to the Office of Fair Trading about BSkyB's move. NTL stated that it had withdrawn its attempt to buy ITV plc, citing that it did not believe that there was any possibility to make a deal on favourable terms[8]. At the same time as the NTL bid, RTL, the owner of Five, was also rumoured to be preparing a bid for ITV plc,[9] with the possibility of a stock-swap with BSkyB. The plan would see RTL acquiring BSkyB's stake in ITV plc (with the aim of further acquisitions of shares in the future) in exchange for BSkyB taking full control of Five. However, no move from RTL has yet materialised so far.

[edit] References

  1. ^ a b c d e f g h i An Overview of Television in the UK Ofcom, 2002
  2. ^ Carlton-Granada merger clears last hurdle The Guardian, 2003
  3. ^ NTL (2006-11-09). "Ntl Incorporated Discussions with ITV plc". Press release. Retrieved on 6 December 2006.
  4. ^ ITV plc (2006-11-09). "ITV and NTL 'in merger talks'". Press release. Retrieved on 6 December 2006.
  5. ^ Welsh, James (2006-11-17). "Sky buys 17.9% of ITV", Digital Spy. Retrieved on 6 December 2006. 
  6. ^ Wilkes, Neil (2006-11-20). "Sky/ITV: Branson statement in full", Digital Spy. Retrieved on 6 December 2006. 
  7. ^ Welsh, James (2006-11-21). "Ofcom examines impact of Sky's ITV stake", Digital Spy. Retrieved on 6 December 2006. 
  8. ^ Oatts, Joanne (2006-12-06). "NTL complains about Sky as it drops plans for ITV Ofcom", Digital Spy. Retrieved on 6 December 2006. 
  9. ^ Oatts, Joanne (2006-11-16). "RTL to make ITV decision this week", Digital Spy. Retrieved on 6 December 2006. 

[edit] External links

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