Spotting who is to become the next chief executive of ITV hasn’t been an easy job. All sorts of names have been in the frame and a number of players have at various stages been tipped as The One. There was Simon Fox, chief executive of HMV, who decided that his job at HMV hadn’t been completed yet, although it’s unusual these days for that sort of loyalty to stop anyone. Guillaume de Posch, former chairman and chief executive of German broadcaster ProSiebenSat.1, had his moment in the limelight in a clear case of Germanic humour.
Another leading candidate has been Pascal Cagni, the European head of Apple even though it is unclear how much he knows about the Herculean task of managing a commercial network television company through the worst recession since television was invented.
Then there is the latest, and most plausible frontrunner by far, Tony Ball, the former chief executive of BSkyB. In fact it does Ball a disservice to characterise him as a “former” anything. He is chairman of – and a major investor in – Kabel Deutschland, the largest German cable TV group, a company worth more than ITV. He is also a non-executive director of Ono, the Spanish cable TV group and of BT.
Then there is John Cresswell, ITV’s chief operating officer who has never managed to get himself considered a front-runner. He faces grave disadvantages in trying to get the top job. He has a detailed knowledge of the business and has done more than anyone else at the day-to-day level to cut costs and at least help point ITV in the direction of recovery. However, executives don’t often get thanked for that sort of thing. Just ask John the Baptist.
So we are agreed. Tony Ball really is the front-runner at the moment and the unfortunate timing of his having joined the BT board in July will be smoothed over in some way or another.
Two big questions remain. Why would Ball do it after five agreeable and lucrative years far from the British media scene? And what would Ball’s vision of ITV look like?
What is certain is that when he relaxes on his farm north of Barcelona among the olive groves that bask in such lovely EU subsidies, Tony Ball doesn’t need the money. There was the £10m made from his two years at Sky, but Ball has almost certainly made even more from his investment in Kabel Deutschland, which has 9 million connected homes.
The man who started his working life as a broadcast engineer at Thames Television has described ITV as “a bit of an itch” that he would quite like to scratch. Pride and the opportunity of taking on another big, full-time job are also factors.
The bigger question is what Ball would do with ITV and what his appointment would say about how the shareholders see the future of commercial television.
Tony Ball is not a steady-as-she-goes kind of guy. When he arrived at Kabel Deutschland there were 20 executives in place. Every single one has been replaced and the staff of 4,000 staff has been cut to 2,000.
Ball’s early pitch for the ITV post involved a rights issue to reduce debt – something that could involve dilution for some shareholders, who are not up for such a bumpy ride.
He believes in the future of network television, but would place much greater emphasis on creating new streams of income to supplement advertising revenue – from customers paying for online or digital TV.
The sentiments are spot-on, but the issue of how much money he will actually get online is a moot point. Every time ITV executives look at turning the company’s digital channels away from free-to-air the numbers do not appear to stack up. As one City analyst put it, Tony Ball would very much represent “the nuclear option”.
ITV shareholders will have to make up their minds before the end of this month whether ITV still needs the nuclear option or whether the Grade/Cresswell duo have already done much of the very necessary cutting and purging the mistakes of the past, such as Friends Reunited.
But what if – just for the sake of argument – ITV’s fortunes are already on the turn and that the company is heading for profits of around £150m in the current year. What if advertising picks up, not perhaps to the same extent as in the good old days, but picks up nonetheless? And what if – as seems likely – there is a relaxation of the Contract Rights Renewal (CRR), which dictates how much ITV can charge advertisers?
Listen carefully and you can hear whispers that say ITV could make as much as £400m a year profit on its current cost base when the recession is fully over. Is the nuclear option already almost out of time?
Tony Ball is by far and away the most favoured and best-qualified candidate for the job. No contest. And an announcement could be imminent. But perhaps Cresswell the tortoise might be worth an each-way bet – especially given the payout on such low odds.