Source: The Independent On Sunday – 24th June 1990
When Christopher Chataway read the first news broadcast on commercial television in September 1955, it must have seemed an eminently sensible idea for the ITV regions to club together to create a single news organisation.
Thirty-five years later, as television faces its brave new world of competition and deregulation, nobody is quite sure whether ITN is a pot of gold or a museum piece of mainly nostalgic value.
For years, while ITN reporters were dodging bullets, the company awa also keeping its head down. It’s cosy relationship with the 15 ITV companies, which owned ITN’s shares and, in turn, were its main client, meant that the news organisation had no need to publish accounts or show a profit.
With the arrival of the Broadcasting Bill, and Sir Alastair Burnet’s subsequent run-in with the ITV companies, ITN suddently began making headlines of its own.
Under the Government’s plans – supported by Sir Alastair – the ITV companies would have to relinquish control of the company that provides the news. The most likely scenario, proposed by Yorkshire Television’s Clive Leach, envisages the assets of ITN being hived off into a separate company, which would be retained by the current shareholders, while 51 per cent of the news providing service would be sold. But according to ITN’s deputy chief executive, Paul Matthews, the shareholders have not ruled out the sale of the company as a while. “It’s a question of whether that is more likely to recognise the full value,” he says.
The prospect of even part of ITN being put up for sale has inevitable focused City eyes. Putting a price on it though, has so far proved little more than a guessing game.
Apart from its television news service, ITN makes money from a number of related activities, such as selling archive material, marketing home videos and hiring out technical services. It also owns Basys, a company which dominates the world market for computerised newsroom systems, and has 45 per cent of Worldwide Television News, an agency that produces and buys news stories for worldwide distribution.
Browen Maddox, media analyst at Kleinwort Grieveson, points out that the core of ITN’s business is its contract to ITV and Channel 4, which expires in 1992. “The big question is: will it be renewed, and if so, by how much?”
Who Owns ITN?
[table id=2 /]John Sanderson at County NatWest Securities believes there is an even more fundamental impediment to valuing ITN: “It’s not a business. It’s a construct of an age that has passed.”
Mr Sanderson says that ITN has never been run on commercial, profit-making lines, and might find it hard to compete with leaner news-gathering organisations like that run by TV-am. The possibility of a second news provider being given a contract for Channel 3 (as ITV will become) around 1994 has already been mooted by IBA chairman George Russell.
Mr Matthews rejects claims that with some 900 staff – 200 less than it had a couple of years ago – ITN is still grossly overmanned. He claims it could hold its own in a competitive environment.
Already, moves are afoot to put ITN on a profit-making basis. This year’s 22 per cent increase in ITV’s contribution includes a built-in “dividend” for shareholders of 6 per cent. It is also undertaking an internal programme of “divisionalisation” aimed at creating two or three separate cost centres in addition to Basys. One of these could be a commercial division, not dissimilar to BBC Enterprises, incorporating ITN’s video, archive and publishing interests. A second division might sell ITN news services to new broadcasting outlets.
How ITN will fare in an increasingly competitive world is uncertain. Mr Matthews says: “My view is that, with the burgeoning TV services around the world, the market for news and current affairs will continue to grow.”
Bronwen Maddox is not so sure. “I’ve always been very sceptical about whether they can get much international business. You run into the problem of who gets priority on the scripts.”
As ITN prepares to move into new headquarters in London’s Gray’s Inn Road, refurbished at a cost of some £45m, it is not just the view from the window that will change. With the umbilical cord to parent ITV about to be cut, the words Independent Television News may have a sharp new ring in the 1990s.
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