Ex-Asda boss faces daunting trial in ITV jungle

Norman is admirably upbeat. Yet he will know the previous two chairmen, TV grandee Michael Grade and former Bank of Scotland banker Sir Peter Burt, soon found themselves crying: "Get Me Out Of Here!"

Neither of them lasted three years in the ITV jungle — a short tenure, even by the City's exacting standards.

They couldn't solve the deep-seated problems which predate the recession and go back at least to 2004, when ITV was created by the merger of Carlton and Granada. Audiences have been fragmenting in the age of multi-channel TV and the internet; there is the tough regulatory regime called Contract Rights Renewal which keeps its advertising rates low; and there's also a big pension deficit.

On top of those woes that Grade inherited, he also had to contend with the worst advertising recession in recent memory — 18 months of falling revenues from June 2008. Worse, there was no pay-TV strategy, unlike BSkyB, which could bring in subscription revenues to offset the plunge in adverts.

It was also the case that 66-year-old Grade didn't have a great grasp of online strategy either. Memorably, when Scottish singer Susan Boyle went "global" on Britain's Got Talent in April, with over 100 million video viewings on YouTube, ITV had scant deals in place and hardly made a penny. Meanwhile, other online acquisitions, like the 2005 purchase of Friends Reunited website for £175 million, fell flat.

ITV recorded a £2.7 billion loss for 2008 after a massive writedown on the value of its assets. No wonder then that the ITV share price crashed from 150p in 2004 to 17p.

A further fly in the ointment was BSkyB boss James Murdoch's decision to buy a 17.9% stake in ITV three years ago, which thwarted the chances of a bid from Virgin Media or a future approach from, say, Channel Five owner RTL or Silvio Berlusconi's Mediaset.

Norman will be aware of all these problems. As he said today, it's "the challenge of adapting to compete in a fragmented digital media world".

ITV has hired him specifically because of his pedigree in turning around businesses, like telecoms firm Energis and the giant Coles Group retail business in Australia.

But ITV insiders also like to point out the broadcaster's fortunes look considerably better now than they did in April when Grade first announced he was quitting. Advertising has finally turned a corner, up 4% in December. The

X-Factor is pulling in record ratings of up to 14 million. Programming boss Peter Fincham has got the schedules humming — even if it means more repeats in prime time with hit shows like Harry Hill's TV Burp being played twice in a weekend.

Video viewings through ITV.com are rising sharply too. There's also talk of an imminent deal with the top US video-sharing website, Hulu, which could generate some proper revenues. Crucially, the share price has trebled since its March low to well above 50p.

Norman's first task as non-executive chairman is to appoint a new chief executive. ITV has learnt, like Marks & Spencer, that having an executive chairman with all the power, as Grade was, is more trouble than its worth.

ITV's failure in recent months to find an external CEO candidate — HMV chief Simon Fox and ex-Sky boss Tony Ball were both courted — suggests it might be wise to appoint someone internally. John Cresswell, long-serving chief operating officer, announced his intention to quit after he was passed over for the job. Could he be persuaded to stay?

Norman will know, given his own lack of broadcasting experience, that he will need a CEO who "gets" telly. Outsiders have a mixed record when they try TV. But theoretically, the fact the chairman hasn't worked in the industry himself shouldn't count too heavily against him — after all Grade's remarkable showbiz pedigree couldn't stop the rot.

With his Tory connections, Norman insisted today he won't be calling in any political favours with a new government. Of course not. But it is also a sign of the times, with the winds of change blowing through Westminster, that both ITV and Channel 4 with ex-Treasury mandarin Lord Burns have appointed new chairmen with Whitehall connections in the past fortnight.

The media industry is ripe for change with David Cameron, former corporate affairs director of Carlton TV until 2001, vowing to ease regulation and clip the wings of regulator Ofcom. The fact that the Tories could cut the guaranteed £3.6 billion licence fee income of the BBC — ITV's great competitor in the ratings — wouldn't hurt either.

In all this, we should perhaps sound another word of caution about Norman. His CV is just what the City likes: Citigroup banker, McKinsey management consultant, MBA from Harvard, chief executive of several big retailers (Kingfisher as well as Asda), senior adviser to Lazards' investment bank.

But he didn't have such an easy time in the media spotlight when he was a key player in William Hague's Tory team. At Conservative Central Office in the late 1990s, insiders complained at the time that Norman's cost-cutting programme as chief executive was "treating the party as if it was a supermarket" — a cheap jibe to make against an ex-Asda man but still telling.

When Norman was promoted again in 2000 by Hague to a top front-bench role, shadowing John Prescott's deputy prime minister brief, he continued to struggle — and faded into backbench obscurity after the 2001 election was lost. He quit as an MP in 2005.

He will face similar scrutiny at ITV, a very public company, where changes to News At Ten or axing the South Bank Show prompt national debate.

To go back to I'm A Celebrity, there is no guarantee that Norman will come back clutching a handful of gold stars from his stint in the jungle.