ITV Bosses Slam Ad Spin-Off Plan as Merger Verdict Nears

25 August 2003

Bosses of British television network ITV have attacked proposals by David Elstein – a TV executive reportedly plotting a coup at the broadcaster – to spin off its ad sales houses.

The network’s joint managing directors Mick Desmond and Clive Jones last week wrote in the Financial Times that Elstein’s suggestions would involve “undoing much of the good work of the last year.”

ITV’s two major shareholders Granada and Carlton Communications are seeking regulatory clearance to merge. However, advertisers and agencies have lobbied against the combination of the duo’s ad sales operations, as the resulting company would control over half of Britain’s TV ad market.

Granada and Carlton’s respective chairmen Charles Allen and Michael Green are staunchly opposed to ditching any ad sales units, even threatening to abort the merger if regulators make this a condition of approval.

But Elstein, former boss of the smallest terrestrial channel Five, is said to be preparing a post-merger coup – either through a buyout backed by venture capital or through pressure from the ITV duo’s investors (some of which are unhappy with the proposed management line-up of Allen as ceo of the combined firm and Green as chairman). Elstein reportedly wants to install his own team and spin off both sales houses [WAMN: 08-Aug-03].

However, Desmond and Jones argue this would destroy recent attempts to improve links between broadcasting and ad sales. “Perhaps the most significant achievement [of the last year] has been to introduce a level of analytical rigour to the schedule previously unknown in ITV,” they wrote. “Crucial to this has been narrowing the distance between the sales houses – and our customers – and the schedule.”

Their comments come as the regulatory review of the merger nears its end. The Competition Commission has now handed its final report to trade and industry secretary Patricia Hewitt, who is due to announce her verdict within a month.

Data sourced from: multiple sources; additional content by WARC staff