ITV has still got Talent so that's why buyers are sniffing around

Can they be serious? Consider the parlous state of ITV as those would-be buyers size up their possible bids for the 17.9% stake currently, and unhappily, owned by BSkyB.

Britain's biggest commercial broadcaster is, in fact, Britain's biggest broadcasting nightmare. It has falling profits - 35% down in 2007 compared with the year before - with sliding advertising revenues and is having increasing difficulty maintaining an audience share in this age of multi-channel TV.

It has dispensed with the services of its director of television, Simon Shaps, and is awaiting the arrival of his replacement, Peter Fincham, in the middle of next month. Meanwhile, everything is on hold, with programme transmissions being delayed. I am told that senior staff feel they are on the back foot and uncertain if they are ever going to go forward again, despite assurances from Fincham, who has been meeting people to tell them that things will get better.

One key sign of just how bad matters have become has been the response to the much-trumpeted return of the ITN News to its old 10 o'clock slot with Sir Trevor McDonald and former Sky News presenter Julie Etchingham.

In its first three months, News at Ten attracted an average of just 2.2 million viewers, a mere 100,000 extra than it got previously. That compares very unfavourably with BBC1's 10pm news, which has 4.8 million regular viewers.

What is so interesting about the failure to win a large audience for the news is that it is not bad. McDonald and Etch-ingham do a decent job. The editing is tight. The stories are well told. It is not being watched because, in terms of news credibility, ITN just cannot match the BBC. On one night in March it drew only 1.7 million people.

But the failure to maintain audience levels also says a great deal about ITV's current status. It has loss the trust of the British public who once routinely made it the channel of choice.

Despite the best efforts of its executive chairman, Michael Grade, since he arrived 16 months ago, ITV's own drama has been more absorbing than the dramas that were supposed to win back viewers.

It does have successes, such as Britain's Got Talent, Ant & Dec's Saturday Night Takeaway and the enduring lure of Coronation Street. But these are nuggets among the dross, and new material - billed as "high-concept" shows - such as Echo Beach, Moving Wallpaper and The Palace, a particularly execrable piece of fluff, did not win either critical praise or ratings.

All have performed badly compared with old favourites, like Foyle's War, which Shaps was about to scrap before he was scrapped. I have to say I smiled when I saw that Grade had excused the failure of his new output by suggesting they had been "ahead of our audience".

The Palace, Michael, was so far behind the audience that it is a wonder anyone bothered to watch a full episode. I did five minutes on two occasions and howled with laughter. It was a bad joke, a bit like ITV's share price in recent months.

Of course, it took off following claims of possible bidders and, just as predictably, slipped back again yesterday when there was a dearth of further news about an imminent acquisition.

But it does make one wonder why Gerhard Zeiler of RTL, the European TV and radio giant that operates under the umbrella of the German media behemoth Bertelsmann, should even be contemplating a bid. The same question can be asked of the other named suitor, Haim Saban, whose £1.72 billion fortune supposedly makes him America's 102nd richest man. After all, he made that money through shrewd deal-making.

But I believe the reasoning of RTL and Saban, if the reports of their interest are serious, makes sense. The ITV brand may be tarnished, but with the right investment and hiring of the right talent, it could be polished once more.

Though it is competing in an increasingly unpredictable and fragmented digital landscape, it could still secure an audience large enough to keep advertisers interested. All is not lost.

Of course, as Grade would readily point out, that's what he is in the midst of doing himself. His revolution is far from over and once he gets Fincham on board things may well change for the better. People can be lured back to click "channel 3" on their remote controls.

Grade's track record does not inspire confidence, however. If he doesn't turn ITV around by the end of this year, he will be under pressure to go. On the other hand, maybe RTL or Saban will force that issue well before then.