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Silvio Berlusconi and Michael Grade
Potential bidder: Silvio Berlusconi and ITV chief Michael Grade

Michael Grade quits ITV opening way for Berlusconi to expand his media empire

Nick Goodway
23.04.09

The future of ITV was thrown into turmoil today when Michael Grade announced that he is to quit day-to-day running of the broadcaster.

Mr Grade, one of the most powerful figures in British television, shocked the industry by saying he would take a back-seat role as non-executive chairman by the end of the year.

Industry experts said the move opened the way for a £1billion takeover bid for the struggling commercial broadcaster, with Italian prime minister and media mogul Silvio Berlusconi's Mediaset the latest name in the frame.

In a statement to the Stock Exchange today ITV said "it would continue to evaluate all options to improve the strength of the balance sheet in response to the significant deterioration in the advertising market".

It also said Mr Grade had indicated that the end of the year, at the latest, would be "the right time" to step down as executive chairman.

Mr Grade was parachuted in from heading the BBC to rescue ITV at the start of 2007.

His arrival was greeted by cheering staff but the worst ever downturn in advertising revenue, massive cost cutting - including hundreds of job losses - and a £2.7billion fall into the red last year have taken the gloss off his leadership.

The cigar-chomping 66-year-old always planned to step back from his role as executive chairman to become part-time, non-executive chairman of ITV but today's decision means he will cease running the company a year earlier than planned.

Any takeover of ITV would come as the entire British commercial television sector is at risk, with Channel 4 and Five struggling to survive.

Other potential bidders for ITV include Walt Disney Corporation, Five owner RTL and Big Brother maker Endemol.

Last month Mr Grade was forced to tear up his ambitious plans to turn around ITV, saying: "These are the worst conditions I have ever seen in more than 30 years of broadcasting."

ITV's advertising revenues have fallen by more than 20 per cent in the first four months of this year with little sign of any recovery in sight.

Despite successes such as Britain's Got Talent and I'm a Celebrity Get Me Out of Here, ITV's flagship channel ITV1 has steadily lost market share to rivals such as Sky and smaller digital channels. Mr Grade has grown ITV's digital channels but has been forced to admit that online ventures Friends Reunited and Scoot have failed.

Last year he took a £1million pay cut when his annual cash bonus was scrapped, giving him nothing like the original package of £8million which was designed to lure him away from the BBC.

When asked if he could survive the growing pressure at ITV, Mr Grade told the Evening Standard last month: "I think everybody at ITV feels under pressure. We will get through this recession and be ahead when conditions turn around."

ITV's profits before write-offs crashed 41 per cent last year to £167million and it owes banks more than £700million. Profits this year could slump as low as £50million, according to City analysts - a far cry from the "licence to print money" which is how Lord Thomson described the ITV franchises when they were launched more than 50 years ago.

Today ITV announced it wanted to secure a deal, which could raise up to £200million, for its digital broadcasting infrastructure which sells services to Freeview, Top Up TV and BT Vision.

Reader views (6)

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Berlusconi? Walt Disney Company? WHAT THE HELL? This is not what ITV need? To survive, they need to employ a person who has experience in the media world and can steady a ship. Sky has did, why not ITV? They can not continue to have anymore showmen, they need someone with understanding and wisdom. ITV, althought a long shot, need to hand back the licences to regional companies. A lot of good talent came out of there and friendly services is what make people turn in. Fine, I know there is a digital switchover coming but it will be a strenght. Without this, they will just continue to churn out more dross. Go back to roots, ITV along with moving with the times. Your TV was better 20 years ago, copying those successes and viewers will return.

And please can everybody stop attacking the BBC licence fee, it is not irrevelant!

- Douglas Varney, Brighton, England

Alessandro, you are right, Berlusconi is a very successful businessman. But he can't work in a real free market.
He needs to control the market to keep up his business.

- Marco, Watford UK

Frank, maybe you come yourself from the third world or you are just blind if you make such a "poor" comment.
Berlusconi´s Group Mediaset is one of the best run companies in the sector that gives a work to more than 250.000 people in several countries.
His televisions are open to anyone and give space to anyone being some of the journalists and directors of the news of Mediaset openly leftists.
He is a successful businessman and this can´t be denied. What about Mr Michael Grade? If he sells it meens things don´t go the right way..

Take care.

- Alessandro Busolin, Milan, Italy

I agree with you frank. Berlusconi is a sick joke. If you get to the bottom of Berlusconi's business model it is essentially fascist. Neither Sky not Berlusconi can be allowed to get their hands on ITV. If so we can kiss goodbye to any sort of open competitive television or variation in programming.

The only safe options are Branson or someone with no Establishment ties whatsoever.

- Sebastian, Brent

What Berlusconi wants Berlusconi gets!
Supposed he wants to buy the UK, who can stop him?

- Rollo, London

We have a problem with our own politicians and their self interests. We do not need nor want this third world politician dictating to any quarter of the media in this country.

- Frank, Home Counties, England.


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