The UK’s only two remaining independent terrestrial TV companies – STV which operates in Scotland and UTV Media in Northern Ireland – are both in the takeover frame following recent troubles.
STV, formerly Scottish Television and best known for its long-running Taggart crime series – has slipped to a £900,000 loss following the £18m settlement of a number of legal disputes with big brother ITV over programming and scheduling. STV shares have risen sharply in the past week despite the loss because investors expect a bid, most likely from ITV.
At UTV long-serving chairman John McGuckian has been booted out because other directors felt he was too close to Dublin-based TVC Holdings which owns 18 per cent of the company. Two non-executives, Shane Reihill, who is executive chairman of TVC, and Kevin Lagan have resigned in protest, citing a dispute over ‘corporate governance.’
ITV, formed from a merger between London broadcaster Carlton and Manchester’s Granada, has been quietly picking off its independent commercial rivals in recent years (Channel 4 is a UK government-backed company while Channel 5 is owned by Express Newspapers’ Richard Desmond). Last November it bought Channel Islands broadcaster Channel TV and, before then, breakfast TV company GMTV.
ITV CEO Adam Crozier (pictured) is sitting on a £500m cash pile having cut costs at the UK’s biggest terrestrial commercial broadcaster and seen revenue recover, so STV, valued at £42m, would be a tiny bite. It’s hard to see how STV would attract a rival bidder given its dependence on ITV for the vast majority of its programmes.
UTV is a bit more complicated; as well as the licence to broadcast in Northern Ireland it also owns 18 radio stations including the successful London station Talksport plus there is 18 per cent shareholder TVC. UTV is valued at £129m after a sharp rise in its shares too.
Crozier has said that he wants to wean ITV off broadcast advertising as its only real source of income, citing the potential of online. But there is no evidence yet of this happening on a significant scale and ITV is doing very nicely out of old-fashioned ads. Owning all the TV companies that used to be make up the old ITV regional federation in the days before BSkyB muscled onto the scene may still be attractive.
Also two of Crozier’s senior sales team, Fru Hazlitt and Simon Daglish, are former radio executives so they may see the benefit of adding UTV and its radio stations to ITV.
It’s also possible that Crozier and his chairman Archie Norman would like like ITV to get bigger (and possibly take on some debt) to ward off predators. The mighty Apple is rumoured to be looking at ITV, primarily to get the rights to the names ITV and iTV which it may well want for its eagerly-awaited new internet TV product. ‘Apple TV’ will also need exclusive content, which ITV has in abundance.
ITV would cost at least £3bn ($4.7bn) but this would be no problem for Apple which is sitting on a $90bn plus cash pile.