Iostar, the start-up television company from which Dawn Airey quit as chief executive after just a week, is facing financial meltdown and could be wound down “within weeks”.
Iostar’s business plan relied on raising between £15m and £20m to buy a number of talent, production and distribution companies. A source close to the company admits the model was “too ambitious” and that it was already considering being scaled down to being only a production house.
Its apparent failure so soon after launch could come back to haunt its high-profile board members, including Stephen Fry, former Zenith Europe chairman Tim Wootton, and chairman Dick Emery, who retired as chief executive of UKTV last year.
Airey, previously Sky Network’s managing director, joined the venture last Monday but resigned, citing breaches in her contract. She is currently consulting her lawyers.
A company spokesman says the board continues to try to raise enough money for the distribution and production projects announced in Cannes earlier this month.
Hit Entertainment co-founder Mark Grenside is credited with launching the venture in November last year alongside entrepreneur Tim Carron Brown. It is the latest in a number of entrepreneurial failures for Carron Brown, whose role at Iostar was “to raise the money and arrange the financing”.
Carron Brown was also the entrepreneur behind one of the most dramatic dot-com crashes of 2000. Efdex, an online market for food and drink called in the receivers in September 2000 going through £41m of investors’ money in two years. Iostar director Laurence Isaacson, co-founder of the Chez Gerard restaurant group and a former advertising account man, was also an Efdex director.
In June 1996 Carron Brown became chief executive of “new business network” Channel 11, which secured £2m of funding. The company was closed in May 1997 with £500m owing to creditors.