US poachers close in as mist clears on ITV merger

The big beasts descended on Cambridge last week for the Royal Television Society Convention. They included top executives from what Greg Dyke has dubbed “the two 800-pound gorillas” – the BBC and BSkyB – and other fine specimens from the TV jungle, such as ITV, Channel 4, Five, Ofcom and the culture and media secretary Tessa Jowell.

In her keynote speech, Jowell teased Dyke about his statement last month that he wanted ITV to emerge as a third 800-pound gorilla: “At first I thought he meant he wanted a big beast that you couldn’t ignore. Then I realised he’s been watching his David Attenborough, and what he actually wants is a gentle, shy creature on the edge of extinction.”

There were few shy or gentle creatures on display over the next two days of the conference, but the threat, if not of extinction, at least of takeover or sharply reduced circumstances hung over both the BBC and ITV at times. According to some newspapers, anyway.

Ms Jowell didn’t say much that was new in her speech, which is why Friday morning’s newspapers largely ignored it. The exception was The Guardian, which gave it the splash headline: “Labour orders BBC shake-up – Jowell warns of radical changes in purpose and funding by 2006”.

What she’d actually done was give a few more details about the long-anticipated review of the BBC Charter, which expires at the end of 2006. Jowell warned that the review would be a lengthy process, involving widespread consultation with the public, and she said she’d asked the former Treasury mandarin Lord Burns to advise her on it. She also said that “one certain outcome would be a strong BBC, independent of Government”, presumed to be a coded reference scotching speculation that the Government might want revenge over the Hutton Inquiry.

Yet The Guardian read into the speech “a stern warning that the BBC cannot expect to continue in its present form when its Royal Charter is renewed in 2006” – a warning that had escaped the rest of the audience, including the culture department civil servants who had drafted it. This may explain why the following morning an entirely different piece appeared, based on the same speech, headlined: “Jowell stands up for BBC independence”.

It began: “The culture secretary, Tessa Jowell, has delivered a strong defence of the BBC’s right to report anti-government views during times of war, as pressure grows on the corporation’s governors over the David Kelly affair.” There was no mention of a radical shake-up.

This is not to say that the BBC won’t have a tough time over charter renewal. Patricia Hodgson, chief executive of the soon-to-be-abolished Independent Television Commission, told the convention the BBC was in “deep trouble” and a much worse position than it

had been at the time of the last review.

She’s in a position to know, as the former BBC director of strategy who helped secure its last licence fee settlement. She said that deal had been loudly opposed by commercial interests because it had given the BBC an above-inflation licence fee increase, required it to launch new digital channels and be successful commercially.

On top of that commercial opposition, she said, the current political turmoil means the BBC now had two major political parties “feeling pretty sore” about it. As well as the BBC’s row with the Government, the Tories are lobbying for a sharp cut in the licence fee.

But it wasn’t just the BBC that had cause for concern. Two American executives told the Cambridge delegates that they might be interested in buying a merged Granada and Carlton, now they can do so under the new Communications Act. Television programming mogul Haim Saban and Mel Karmazin, president of the US media giant Viacom, both said they’d look at the company if the merger went ahead on acceptable terms.

Saban, the former Mighty Morphin Power Rangers producer who sold his Fox Family channel to Walt Disney two years ago, said he would start looking at the UK market from October 8 – trade secretary Patricia Hewitt is expected to announce her decision on the merger on October 6. But he said he would have no interest in the companies if regulators imposed onerous conditions. “Our level of interest if they have to divest ad sales goes down to zero. We will not invest one dollar,” said Saban.

Carlton and Granada played down the likelihood of such a takeover. “I don’t think it is even on the cards,” Carlton chairman Michael Green told the convention, while Granada chief executive Charles Allen said: “We have got a lot of growth to come and I think shareholders will want to see they get their share of that value rather than give it away,” he said.

Dyke used the opportunity to attack the Government, saying the decision to allow American takeovers was disastrous and had been taken by a “small coterie in Downing Street” without proper consultation.

Meanwhile, prompted by questions from Dyke, the other 800-pound gorilla, BSkyB, admitted it would seriously consider launching a sixth major channel in direct competition with ITV and Five, if the rapid growth of Freeview helped accelerate the Government’s digital switchover plans. The sixth channel would “evolve” from Sky’s existing travel channel on Freeview and offer a mix of lifestyle and entertainment programmes. By then, of course, if reports are to be believed, it could have a new boss – Rupert Murdoch’s son James. And he’s unlikely to be a shy or gentle creature either.

Torin Douglas is media correspondent for BBC News