Michael Grade to quit ITV as exec chair
Speculation mounts as to identity of possible successorLONDON -- ITV executive chairman Michael Grade on Thursday announced his plans to relinquish day-to-day running of the ailing company "as soon as practicable." It's the latest development in a saga that has seen the U.K.'s most powerful commercial network humbled, as its strategy and direction continue to be found wanting.
ITV's board said Thursday that Grade will remain non-executive chairman of the broadcaster, famous for such shows as "X Factor" and "Coronation Street," but will hand over the reins to a new chief executive as soon as a successor is found.
Grade will remain in place to guide ITV through the current round of government and regulatory reviews into the U.K. television market but will step down when they are finished later this year.
Speculation about who could replace Grade has been tempered by the sheer scale of the challenge facing the broadcaster, but executives including former ProSieben chief executive Guillaume de Posch, broadcasting minister and former NTL chief executive Stephen Carter and former Channel 4 chief executive Michael Jackson are among those thought to be possible contenders.
ITV shares have been rising in recent days on speculation of a potential bid involving Italy's Mediaset but fell by 4% to 30.5 pence (44 cents) in early trading on news of Grade's departure, which will come a year before his current contract runs out.
"In the light of the regulatory timetable now expected, Michael Grade has recommended to the board that the conclusion of the regulatory reviews would be the right time for him to relinquish his executive responsibilities and become non-executive chairman as planned," ITV's board said in a statement.
"It is intended that a new CEO will be appointed as soon as possible."
The board said ITV has shored up its balance sheet and had no need of a rights issue -- which would dilute the dwindling value of its shares still further -- but would instead seek a buyer for its thriving digital terrestrial channels business SDN. That is thought to have been worth £300 million ($436 million) before the credit crunch took hold. ITV said it had also taken on a further £58 million ($84 million) in covenant-free financing.
ITV announced annual losses of £2.6 billion ($3.8 billion) in March after the effects of the global financial meltdown on advertising revenues forced it to downgrade its broadcasting and online assets by £2.7 billion ($3.9 billion). The broadcaster has around £730 million ($1.1 billion) in debt and a pension fund deficit of £178 million ($259 million).
Grade, who was hailed as a potential savior for the network when he joined in 2007, has put his weight behind a "content-led" strategy focused on growing ITV's local and international production businesses and lobbying for the removal of regulatory burdens that he said were outdated in the digital age.
But the results have been mixed and Grade has been forced to cull hundreds of jobs in order to protect program spending. He has also warned that without speedy release from regulatory obligations, ITV's £1 billion ($1.45 billion) a year group-wide program spend will have to be cut.
Crucially, the broadcaster has yet to find a way to monetize its online content and negotiate the transition of advertising from television to online.
Insiders say that with over 600 jobs under review the broadcaster is in turmoil and morale near rock-bottom.
"There doesn't seem to be any appetite for leadership or taking a risk," said one director level executive. "To pick great new shows you have to have a creative mindset that ITV doesn't have. The body language just isn't there."
Analysts have urged the broadcaster to move its digital channels to a pay TV model in a bid to lessen its dependency on advertising revenue, but execs have remained quite on the subject. But despite the scale of the challenge, some still believe that the game is far from lost.
"It's still a great business," said one former executive. "It isn't being managed well, but this is still a network that can still get 40% of the audience at 9pm and that is still a really good deal."