NEWS VALUES

ITN is about to enter a new era as News at Ten once again faces possible rescheduling, a revised ownership structure looms and rivals gather their forces. Meg Carter assesses its future

News at Ten is once more making the news. Amid growing concern about airtime prices and falling audiences, the rescheduling of ITV’s flagship news programme is again under discussion – among advertising agencies at least.

ITV Network Centre, and not ITN, will decide whether News at Ten is rescheduled. Many agencies believe it makes sense and most believe it will happen eventually. However, any admission that it is under discussion guarantees controversy. Last time round it even prompted Prime Ministerial comment.

Small wonder, then, that ITV chief executive Stuart Purvis is reluctant to discuss the issue. “It’s a matter for Network Centre, not for us,” he insists, adding: “As far as we are aware, it remains off the agenda.” For the time being at least, maybe. Few believe that even if the decision was taken tomorrow, a time change would – or could – be implemented before the end of 1996, which hardly eases advertisers’ current ITV schedule fears.

Instead, Purvis says, his attention is focused on the more immediate present. ITN is preparing to enter a new era, he explains. By the end of the year, a revised ownership structure will be agreed, enabling the company to close a chapter in its 40-year history that has been characterised by dispute and disagreement among its ITV shareholders.

ITN was launched in 1955, initially owned by all of the 15 ITV companies. But from January 1993, it was required to move from being an ITV-owned, cost-centred news organisation to become a profit-making news business built on commercial contracts. Its two core news supply deals are with ITV and Channel 4, which will renegotiate its 23m-a-year contract in late 1995.

Purvis makes no bones about the importance of these two pieces of business to the company, despite ITN’s intention to develop other services and overseas news contracts. And the Government’s cross-media ownership proposals published last month promise greater stability, he believes.

The National Heritage department is now reviewing the maximum stake each ITV shareholder can have and has proposed the scrapping of a rule which required ITV to reduce its stake from a combined 82 per cent in ITN to 51 per cent.

Granada and Carlton – each holding 36 per cent – are expected to be required to dilute their stakes. Although new limits are yet to be set, it is predicted they will be about 20 per cent. MAI, which holds a five per cent stake, has been widely tipped as a possible buyer. It could increase its stake to 20 per cent, in line with new Carlton and Granada shareholdings. The proposed scrapping of the 51 per cent would secure ITN’s hold on the 55m ITV news broadcasting contract against possible competition.

“The break with the old scenario of 15 ITV companies around the boardroom table was a major step forward,” Purvis says. Getting rid of the 51 per cent rule really recognises both Carlton and Granada’s large shareholdings and commitment. “Existing shareholders were incredibly supportive, putting money in when others were reluctant.” He adds: “It should be no embarrassment that large ITV companies are large shareholders in ITN.”

Despite bitterness between shareholders in the run-up to the introduction of the existing structure in January 1993, the 18 months since have seen considerable improvement in ITN’s business, Purvis claims. In April, ITN announced pre-tax profits up from 5.6m to 8.1m in the year ending December 31, 1994.

Aside from the ITV and Channel 4 contracts, growth has come from activities including Independent Radio News, broader news-related programme production, the sale of news packages to overseas broadcasters – notably CNN – and supply contracts for broadcasters including NBC Super Channel. Unlike the BBC, which earlier this year launched international channels BBC World and BBC Prime in partnership with Pearson, ITN is happy to remain a programme provider, Purvis insists. “We take no risk other than bad debt,”he says.

“I prefer our route – selling programmes to channel operators at low risk. The BBC has chosen to take all the risk, despite going in with Pearson,” adds Purvis. Penetration is a critical factor, he explains. According to ITN estimates, BBC World is available in about 6 million European homes. Through its own deal with NBC Super Channel, ITN output is seen in 40 million.

Although it has been approached by other parties interested in launching a news-based channel, ITN has not pursued any offers. “There isn’t an ITN channel because for us it is more commercial not to be so,” says Purvis.

“ITN’s brand name is very well known around the world [through the sale of news packages to international broadcasters],” claims Purvis. Future growth will come from securing additional news supply contracts across the globe. Negotiations are under way with broadcasters in at least two regions.

Closer to home, commercial radio remains a key business. Despite recent competition from Reuters Radio News and Chiltern Radio’s syndicate Network News service, Independent Radio News still has the lion’s share of commercial radio business and serves all the major stations. Other types of syndicated factual programming are also under consideration.

UK cable TV is also a market – although only for secondary programme sales. Since the deals struck by Nynex and TeleWest with BSkyB, Sky programming – and Sky News – looks likely to dominate UK cable networks in the future, he believes.

Despite past dalliances with “enterprises” activities such as video and book publishing, neither is a significant business for the company. Purvis says he would like to develop ITN book publishing, although he dislikes the “enterprises” tag. “We have often been asked why we don’t have a commercial director,” he says. “It’s because we are now a commercial company; everything we do is ‘enterprising’.”

But ITN does face competition in certain areas of its business – notably from one of its own shareholders, Reuters. Reuters already offers a news service to radio stations and was involved in three of the four Channel 5 bids; ITN was in the other.

Reuters has long made clear its ambitions to challenge ITN as news supplier to the ITV network. And its hopes have been championed by Channel 4 chief executive Michael Grade who has expressed his belief that Reuters is already unfairly restricted and that proposed cross media ownership changes will be more restrictive, not less.

Although the Broadcasting Act does make provision for the possible licensing of another commercial TV news provider “at some point”, the ITC confirms it has no intention of pursuing this “in the foreseeable future”. This autumn it is due to publish its first performance report on ITN since the start of its current ITV contract three years ago.

Purvis is confident ITN will be given a clean bill of health. “ITV is very happy with the service it gets from ITN,” he insists. “I’m sure some would like it for less money. But as far as I’m aware, ITV has no wish for any other supplier.”

A scenario in which Carlton, Granada and MAI dictate ITN’s future fortunes is attractive, but should Carlton and Granada be required to dilute, there will be others interested in relieving them of their stakes. US companies ABC and CNN and UK publisher Associated Newspapers have all been reported as showing an interest.

For in Nineties broadcasting, there is no such thing as a foregone conclusion.

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