ITV yet to make the Grade

Topper meets the British press

By STEVE CLARKE

LONDON -- For someone reckoned to be a consummate corporate operator, ITV topper Michael Grade's first meaningful encounter with the British press was remarkably corporate averse.

There were no trademark red socks or big cigar, and an utter lack of corporate paraphernalia -- pie charts and eye-watering statistics -- that invariably accompanies annual results presentations.

At times, the atmosphere at the March 7 press confab was more like a funeral, as Grade, only too aware that two days earlier he'd ordered the company to pull the plug on its premium-line phone quizzes pending an inquiry, proceeded to bury the old ITV.

Grade, flanked by ITV's chief operating officer John Cresswell, almost immediately launched into a question-and-answer routine. What emerged was a frank confession of ITV's deep-seated woes.

In other words, the problems he was bought in to fix -- principally the grim performance of flagship web ITV1, which led to the resignation of his predecessor, Charles Allen -- when he stunned the British media industry by defecting from the BBC last November.

Grade, who joined the failing terrestrial TV giant on Jan. 12 as executive chairman, made no references to the figures for the year ending Dec. 31.

Overall profits were £364 million ($702.5million) -- a decrease of 19% year-on-year. Revenue at flagship web, ITV1, dropped 12% to $2.47 billion.

Grade was, arguably, most revealing about Rupert Murdoch-controlled satcaster BSkyB's decision to pay almost $2 billion for a 17.9% stake in ITV -- a deal under scrutiny by regulators.

Speaking openly on the subject for the first time, Grade warned that the stake gave BSkyB potentially huge power over ITV.

As the broadcaster's biggest single stockholder, it could "block any move we want to make," said Grade. "This is an issue ... that we have pointed out to regulators in the interest of all shareholders."

Nothing was said about ITV1's ratings other than that the web had been "shedding viewers at an alarming rate."

However, Grade said he was encouraged by the shows being developed by the creative team put in place by director of television, Simon Shaps, who, as Grade made clear, faces an epic task.

But BBC1's dominance of the 9 p.m. weekday drama slot, filled with shows like "Life on Mars" and "Spooks" (known as "MI-5" stateside) had undermined ITV's fiction output.

Referring to ITV's recent track record in entertainment fare like reality show flop "Celebrity Love Island," Grade was brutal.

"We have been very quick to copy other people's formats," he said. "We've stuck the word celebrity on the front of a copied format and pretended that's good enough. It's creatively bankrupt, to be honest, and we have to wean ourselves off the habit."

The decision in the late 1990s to shift ITV's main evening bulletin, "News at Ten," to make way for entertainment shows had, said Grade, been "a shocking mistake" and was extremely damaging to the ITV brand.

Not even the best actress Oscar for Helen Mirren's starring role in "The Queen," bankrolled by ITV, offered much cheer: ITV will not return to high-risk ventures like movie production.

ITV Play, the digital premium-line quiz channel responsible for generating $104 billion in revenue in 2006, is off-air now but Grade appeared bullish about the future of the genre.

"I want to be able to look any viewer in the eye and say what you are paying for is what you are getting," he said. "I've no concern whatsoever that ITV Play damages the ITV brand. If the ITV brand was that fragile, we'd be in trouble."