Plans are afoot to topple the management and offload the sales houses of Carlton Communications and Granada – leading shareholders in Britain’s ITV network – should regulators approve their merger.
David Elstein, quondam chief executive of the smallest terrestrial television station Five, has put together a team of executives to take the reins at a merged ITV.
Elstein plans to install this unnamed team in place of Granada chairman Charles Allen and his Carlton counterpart Michael Green, who intend to become ceo and chairman respectively at the merged firm. He would then implement a business plan designed to boost pre-tax profits by £100 million ($161m; €142m).
The scheme – several months in the drafting – was disclosed in an interview with the former Five boss conducted by media consultancy Enders Analysis.
It is not clear how Elstein would topple the existing management. One option would be a buyout of ITV backed by venture capital, though analysts believe this may be too expensive. Another possibility is that Green and Allen could be removed by shareholder pressure. Many Carlton and Granada investors fear the two will be unable to work together due to previous personal clashes.
Either way, should Elstein succeed he would sell off both companies’ ad sales houses as part of a radical blueprint for ITV. In contrast, Green and Allen are determined to hang on to these units, even threatening to abort the merger should regulators insist one be offloaded.
“There are benefits from divestment which nobody takes into account,” declared Elstein, “like … an ability to get control with those over-manned salesforces, which is quite difficult when they are all your direct employees.”
Once spun off from ITV, the sales houses would be given a five-year contact to sell airtime for the network.
Other plans for the company include shifting £100m of Granada’s in-house production budget to independent firms, cutting spend on sports by up to £30m and selling £500m of non-core assets.
The Competition Commission is due to report on the £3.6 billion merger by August 26.
Data sourced from: MediaGuardian.co.uk; additional content by WARC staff