A-grade drama as itv raids the beeb to find a new boss

The high-profile defection of the BBC’s chairman to its biggest rival leaves the Corporation ‘incandescent’ as it prepares for a new era

We really are in “you couldn’t make it up” territory. The appointment of the BBC’s chairman to run Britain’s biggest commercial television company is remarkable, not least for its timing.

Not only has ITV just rebuffed a takeover bid from Richard Branson and NTL, but it has seen almost 18% of its shares bought by BSkyB, part of Rupert Murdoch’s empire.

Michael Grade is the third larger-than-life media figure to step into the high-octane ITV drama in as many weeks and he – unlike the other two – has got his hands on the train set. As executive chairman, he’ll be running ITV and so the long-drawn-out search for a chief executive is off, at least for now. He’ll also have a salary of £825,000 a year and a performance-related share award scheme.

No wonder he was pleased. He said it was “like going back home” on the centenary this Christmas of the birth of his Uncle Lew, one of the founders of ITV. He said: “I started there in 1973; they gave me my first chance in TV. ITV is one of the great British media brands. It’s had a difficult time, but the chances of turning round are very high.”

He told BBC staff in a farewell letter that it had been a career move – a choice between going back to programming and “governing” the BBC from a distance. But he certainly leaves a big hole.

The BBC is in the final stages of negotiations with the Government over its next licence fee settlement. Under Michael Grade’s leadership, it asked for an annual rise of 2.3% above inflation, which it’s not going to get. The Chancellor Gordon Brown is widely reported as wanting a below-inflation settlement. The BBC’s hand is unlikely to be helped by the withdrawal of the chairman who said he’d make sure the Corporation was tightly run and regulated.

In addition, under the new BBC Charter, Michael Grade was due to take over as chairman of the BBC Trust, when the board of governors is abolished on January 1st. He was due to provide the continuity between the old board and the new. Instead he’ll be running its biggest rival.

Little wonder that the BBC governors said they were disappointed. The BBC director-general Mark Thompson said many would find Mr Grade’s decision surprising, but the BBC was sorry to see him go and wished him the best for the future.

Jeff Randall of the Daily Telegraph, who broke the story, said Mr Grade’s decision is a shock to the Corporation. On BBC News 24, he claimed very senior BBC insiders had told him: “There is carnage inside the BBC, mayhem, people are incandescent with rage at Michael Grade’s defection.”

If so, that’s not what the BBC was saying publicly. In a statement, it said: “For the last two-and-a-half years, Michael Grade has been a great chairman who, along with the director-general Mark Thompson, has achieved a successful Charter settlement for the BBC. We wish Michael well.”

Privately, insiders are trying to put a brave face on it, saying this is not such a bad time for him to leave. The Charter is secured for a further ten years, with the BBC still to be funded by the licence fee. The level of the licence fee is virtually settled, and will be announced shortly. Michael Grade also ensured that the new members of the BBC Trust are people with a great deal of experience in the media world.

Even so, he was going to have a crucial role in establishing a working relationship between the Trust and the BBC’s new executive board, chaired by Mark Thompson. This is new territory and the ground rules have yet to be established. He was going to provide the continuity. Whoever the Government appoints to take over as BBC chairman will have a critical role to play in its future direction and regulation.

Of course, sudden departures are not new at the top of the BBC. Mr Grade was appointed as a steadying hand after the previous chairman Gavyn Davies resigned – and the director-general Greg Dyke was sacked – following heavy criticism in the Hutton Report. The chairman before that, Sir Christopher Bland, announced he was leaving to be chairman of BT.

And Michael Grade’s last move from the BBC – to become chief executive of Channel 4 – was equally sudden. By contrast, his appointment – as a former chief executive of Channel 4, managing director-designate of BBC Television and programme director at London Weekend – will cheer ITV and its shareholders, who could do with some good news after the past few months.

Having said that, he did all those hands-on broadcasting jobs a long while ago. Whatever his experience and charisma, Michael Grade won’t find it easy to turn ITV round – especially with BSkyB as his biggest shareholder.

Torin Douglas is media correspondent on BBC News

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