ITV plc

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ITV plc
Type Public limited company
Traded as LSEITV
Industry Media
Predecessor(s) Granada plc
Carlton Communications
Founded 2004
Headquarters The London Television Centre, London, United Kingdom
Area served United Kingdom
Key people Archie Norman1
(Chairman)
Adam Crozier
(CEO)
Products Broadcasting
Revenue £2,389 million (2013)2
Operating income £620 million (2013)2
Net income £330 million (2013)2
Website itvplc.com

ITV plc is a British media company that holds 12 of the 15 regional television licences that make up the ITV network, the oldest and largest commercial terrestrial television network in the United Kingdom. The network, which is branded ITV by ITV plc, 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).

The company was formed by a corporate takeover by Granada plc (the parent company of Granada Television) of Carlton Communications. Granada acquired a 68% controlling interest of the newly formed company whilst Carlton retained the 32% remaining shares.3 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. It acquired the remaining 25% of the Breakfast franchise holder, GMTV, from The Walt Disney Company in 20094 and Channel Television from Yattendon Group plc in 2011.

ITV plc is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

History

Pre-merger

ITV plc was the result of a merger between Granada and Carlton following 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.5 In 1994, Carlton Communications – which had owned a 20% stake in Central Independent Television – acquired the remainder of the company5 and, because of Central's shareholdings, inherited a 20% stake in Meridian Broadcasting. Later that year, Granada acquired London Weekend Television5 through a hostile takeover worth in the region of £750 million. MAI, which controlled Meridian Broadcasting, acquired Anglia Television5; MAI became United News & Media after merging with United Newspapers – owners of The Daily Express in 1996.5 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 Television5 (later re-branding it Carlton, along with Central), Granada acquired Yorkshire-Tyne Tees Holdings5 (with the parent group becoming Granada Media, later simply Granada) and United acquired HTV.5

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.6 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,5 but sold HTV to Carlton in order to comply with the permitted audience percentage covered by a single broadcasting interest.7 It kept the production arm of HTV, however, renaming 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 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 2001,8 with Border's radio assets being retained by Capital Radio plc.9

The merger

In 2004, Granada and Carlton merged, creating a single company for all ITV franchises in England and Wales.10 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);11 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, reduced to a satellite operation of ITV Studios and primarily producing output for the international market or occasionally third parties in the UK, was eventually closed in January 2012.12

Post-merger

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 2002.13 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 2004.14 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, replacing Granada Plus which ITV plc closed down 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 being taken over by replacements ITV4 and CITV, which launched in November 2005 and March 2006, respectively.15

In April 2006 the participation channel ITV Play was launched. 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 continued to be used for a time for part of the gaming section of itv.com.16

Reorganisation

There were rumours of take-over and merger bids during 2006. For example, on 9 November 2006, NTL announced that it had approached ITV plc about a proposed merger.1718 The merger was effectively blocked by British Sky Broadcasting on 17 November 2006 when it bought a 17.9% stake in ITV plc for £940 million,19 a move that attracted anger from NTL shareholder Richard Branson20 and an investigation from media and telecoms regulator Ofcom.21 On 6 December 2006, 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.22 At the same time as the NTL bid, RTL, then the owner of Channel 5, was also rumoured to be preparing a bid for ITV plc, with the possibility of a stock-swap with BSkyB; the plan would have seen 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 Channel 5.23 In the end, no movement was made on this possible deal and RTL sold Channel 5 to Richard Desmond's Northern & Shell Network in July 2010.

In 2010, a large-scale business reorganisation, called "five-year Transformation Plan" was launched. Thanks to stringent working capital management and cost management some of the set goals were already achieved in 2012. These include a ranking upgrade (from BB- to BB+), an increase in audience share and reduction of debt (from net debt of £730 million at the end of 2008, to a positive net cash position of £16 million at the end of the first quarter 2012).24

Operations

Organisation

ITV plc is divided into three divisions: ITV Broadcasting Limited, which operates the TV networks (including the ITV News Group, which runs the ITV regional licensees); ITV Studios, which comprises both UK and international production, ITV's facilities businesses and Global Entertainment which exploits programme rights; and ITV Commercial & Online, which runs itv.com (including ITV Player) and ITV's advertising sales arm, and has responsibility for ITV plc's shareholdings in Freeview, Freesat, SDN and YouView.

Network licences

Through ITV Broadcasting Ltd., ITV plc holds 12 of a total 15 ITV network licences, covering the vast majority of ITV regions across the UK; it holds all licences in England and Wales, and the single one in the Channel Islands.

ITV plc is the sole owner of the ITV national breakfast television franchise ITV Breakfast, formerly known as GMTV, which airs and produces Daybreak and Lorraine. On 18 October 2011, ITV plc agreed to buy Channel Television from Yattendon Group plc for an undisclosed amount, the transaction was completed on 23 November 2011.

Channels

Channels wholly owned through ITV Digital Channels Ltd.:

Other assets

ITV plc owned a 16.9% shareholding in STV Group plc, owner of the Scottish and Grampian ITV franchises. This was reduced to around 5.5% following a rights issue, which ITV did not take up, and was sold in early 2014. It also owns a 40% stake in its news provider, Independent Television News (ITN).

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

In December 2005, ITV plc bought Friends Reunited, a website dedicated to reunited former school friends or work colleagues in a number of countries. In March 2009, the company announced it was selling the site as part of disposal of non-core assets.

ITV plc owned Carlton Screen Advertising, once the largest cinema advertising business in the UK (and still the largest in the Republic of Ireland and Northern Ireland). In 2008, the business's UK and Irish operations were separated, with the UK operation passing to Odeon Cinemas and Cineworld, and being renamed Digital Cinema Media. The Irish operation continued to trade as Carlton Screen Advertising, and remained in the ownership of ITV plc until May 2009.

The company is the co-founder with the BBC of Freesat.

References

  1. ^ "Board of Directors". ITV plc. Retrieved 6 January 2010. 
  2. ^ a b c "Preliminary Results 2013". Itvplc.com. Retrieved 11 March 2014. 
  3. ^ "ITV shares on London stock market". BBC News. 2 February 2004. Retrieved 18 April 2011. 
  4. ^ "ITV takes full control of breakfast TV broadcaster GMTV". The Guardian. 26 November 2009. Retrieved 24 May 2011. 
  5. ^ a b c d e f g h i An Overview of Television in the UK Ofcom, 2002
  6. ^ Willis steps into new role at Granada The Guardian, 12 July 2001
  7. ^ "Carlton buys HTV". The Independent (UK). 24 October 2000. Retrieved 18 April 2011. 
  8. ^ "Granada to buy Border TV assets for £50m if Capital wins bid battle". The Independent (UK). 17 April 2000. Retrieved 18 April 2011. 
  9. ^ "Capital agrees Border carve-up". BBC News. 17 April 2000. Retrieved 18 April 2011. 
  10. ^ Carlton-Granada merger clears last hurdle The Guardian, 2003
  11. ^ "what we do". Shiver Productions. Retrieved 18 April 2011. dead link
  12. ^ "ITV Studios to close Norwich base with loss of 35 jobs". BBC News. 13 January 2012. Retrieved 25 January 2012. 
  13. ^ "BSkyB facing legal threat over Ondigital". The Independent (UK). 17 August 2003. Retrieved 18 April 2011. 
  14. ^ "ITV buys NTL's share in news station ITV News". Cableforum.co.uk. Retrieved 18 April 2011. 
  15. ^ Tuesday, 13 March 2007, 15:13 GMT (13 March 2007). "CITV celebrates its first birthday". Digital Spy. UK. Retrieved 18 April 2011. 
  16. ^ ITV Play digital channel axed The Guardian, 13 March 2007
  17. ^ "Ntl Incorporated Discussions with ITV plc" (Press release). NTL. 9 November 2006. Retrieved 6 December 2006. dead link
  18. ^ "ITV and NTL 'in merger talks'" (Press release). ITV plc. 9 November 2006. Retrieved 6 December 2006. dead link
  19. ^ Welsh, James (17 November 2006). "Sky buys 17.9% of ITV". Digital Spy. Retrieved 6 December 2006. 
  20. ^ Wilkes, Neil (20 November 2006). "Sky/ITV: Branson statement in full". Digital Spy. Retrieved 6 December 2006. 
  21. ^ Welsh, James (21 November 2006). "Ofcom examines impact of Sky's ITV stake". Digital Spy. Retrieved 6 December 2006. 
  22. ^ Oatts, Joanne (6 December 2006). "NTL complains about Sky as it drops plans for ITV Ofcom". Digital Spy. Retrieved 6 December 2006. 
  23. ^ Oatts, Joanne (16 November 2006). "RTL to make ITV decision this week". Digital Spy. Retrieved 6 December 2006. 
  24. ^ At ITV, All New Rules of Engagement - Interview with ITV's CFO Ian Griffiths. Retrieved on August 14, 2012.

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