ITV needs a change agent

It has been a bad few days for Michael Grade. His beloved team Charlton Athletic have been relegated to the third tier of English football. To make matters worse, Brentford will also be playing in League One next season and Grade will have plenty of opportunities to meet Brentford chairman Greg Dyke in the boardroom of The Valley and the more humble surroundings of Griffin Park.

The conversation between the two might not be that warm. Grade is suing Dyke for libel over an article which cast aspersions on Grade walking away from the BBC chairmanship.

The sorry affair really could end up in court because Grade is insisting on an apology and, as Dyke proved when director general of the BBC, he doesn’t really do apologies. This should be a nice little earner for the lawyers.

Last week, a polite inquiry to an ITV director about how the great man was bearing up in the circumstances – a £2.6bn loss for last year – elicited the reply that Grade’s enthusiasm for the task was undimmed and that the slings and arrows were simply bouncing off a hide as tough as a rhinoceros. Less than 24 hours later, the rhino was being cruelly prodded towards the exit.

Did Grade fail? Of course. When you are executive chairman of a listed company and the share price collapses to a recent low of 23p, there is no one else to blame. But could he have done anything different given who he is and where he comes from? Probably not.

He sprinkled the stardust, assembled a top team of executives and even finally in recent months, managed to reinvigorate ITV drama. Yet in the end, not even the most skilled tap-dancer equipped with some of the best one liners in the business could stand forever against structural problems that have long gone unaddressed and were then compounded by rapid technological change and recession.

As WPP chief executive Sir Martin Sorrell put it recently: “Network television will not die but if I am a media owner in one medium in one country then I am in a perfect storm.”

In a curious way, Grade’s generational limits have been brutally exposed by what might otherwise have been one of his greatest triumphs – the singing of contestant Susan Boyle on Britain’s Got Talent.

The little morality tale began nine months ago. Grade was too busy to speak at the IBC content conference in Amsterdam but he decided to do a filmed interview. As the cameras were set up in his vast, rather impersonal ITV office, he joked about how the state of his share options must have played a part in his decision to go for one last hurrah.

Grade came alive in front of the cameras and produced an effortless, beguiling defence of commercial network television. Until he went that bit too far. In Amsterdam, there was a deep intake of breath among the engineers and technologists in the audience when Grade reached the part where he denounced Google and YouTube as “parasites”. The story went rapidly round the world.

You can see what he meant. Google neither funds nor makes £600,000-an-hour drama or Channel 4 News. But the remark suggested to many that the 66-year-old Grade had not made enough effort to keep up with the modern world.

Roll forward to recent Britain’s Got Talent contestant Susan Boyle. Clips of Boyle singing on the ITV show produced more than 12 million viewers for Britain’s Got Talent and more than 100 million YouTube hits. However, ITV has no agreement with Google and therefore has not earned a penny from all that YouTube traffic. Google executives say privately they are keen to reach such an agreement but believe ITV has been more interested in trying to develop ITV.com.

So as Grade prepares to become non-executive chairman later this year, who will occupy the hot seat? It is easier to say who won’t be the next chief executive of ITV than who will.

We can safely rule out Greg Dyke. John Hardie, former ITV marketing director and a Disney executive vice-president, has just tied himself up as the next chief executive of ITN. Michael Jackson, former chief executive of Channel 4, has just become a non-executive director of SMG and is probably too astute to jump into such shark-infested waters.

It is equally unlikely that Dawn Airey, who jumped ship controversially from ITV to go to Five, will be invited back. Internally, Rupert Howell, who is in charge of advertising and marketing, will throw his hat in the ring; as will chief operating officer John Cresswell. Investors may, however, insist on a fresh blood.

The other big obvious question is whether a predator will pounce on ITV during the transition. Someone might be courageous enough to invest for the long term but the venture capitalists are strapped for debt, the City is sceptical – unreasonably so – about the network model, and then there is the vast hole in the pension fund. Forget Berlusconi.

Maybe it’s time to consider a merger with Five – and then Dawn Airey could come back to ITV.