Bottom line 

16 February 2015

Higland view


Because of Lord Thompson’s famous line about Scottish Television being “a licence to print money”, it is easy to forget just how much of ITV was of marginal profitability for much of the channel’s independent life.

In this article, Peter Knight focuses on Grampian, which, as he points out, was not doing all that well due to the combined effects of an advertising recession and the government’s television advertising levy – a politically popular tax that was applied on turnover rather than profit, making investment and medium-term planning all but impossible for the ITV companies. The same conditions applies to many other ITV regional companies.

The most famously unprofitable is probably Wales (West and North) Television, known on air as Teledu Cymru. This company was rendered unprofitable by the General Post Office (GPO), at that time “the regulator’s regulator”, which imposed conditions on the company over and above those set by the Independent Television Authority (ITA). Because almost all of Teledu Cymru’s broadcast area overlapped with bigger companies, the GPO felt the need to make it truly unique, forcing a quota of Welsh-language programming greater than the company itself could supply and forcing it into prime time, where the bulk of audiences were happy to tune away to watch the lighter English-language fare on TWW and Granada. Unsurprisingly, the company quickly fell into administration and was picked up – on generous terms – by TWW.

Teledu Cymru had unique circumstances behind its failure, but it was not alone in struggling. Grampian, Westward, Border and Channel spent much of their lives losing money, breaking even or only ever making a small profit. Channel stands out here as everybody involved knew it could not survive anything but the plainest of sailing. To that end, the ITA, having invested hundreds of thousands of pounds in a complicated, awkward to operate system to provide programming over the air to the tiny station, charged no more than a token rental for the facilities. When the broadcasting unions closed the ITV network in major industrial action, they exempted Channel Television members, who kept the station on air with a parade of filmed and imported material rather than missing the advertising sales and thus falling into bankruptcy. Fellow ITV companies provided programming at a tiny proportion of the true cost – or even freely – while ABC supplied management, technicians and materials at cost or free to get the company started in the first place. When the regional television magazines were abolished in 1968, the ITA left Channel’s magazine out of the new national TVTimes in order that its advertising sales and 6d cover price could contribute to the bottom line.

Meanwhile, the next tier of ITV companies, TWW/Harlech, Ulster and TTT, could usually be expected to turn a profit. But even they had bad years when they lost money and many lean years when investment in facilities, much needed as technology advanced, was just not possible.

For Southern, Scottish and, to a lesser extent Anglia, things were much easier. They served rich regions and could charge a premium for their advertising time. But with the extra money came extra expectations from the ITA, seeking flagship drama and children’s programming from the companies in return for their profits. This type of programming was risky to produce – there was no guarantee that the network would take a one-off drama, no guarantee of a good slot for a serial and as for children’s programming… well, their output remains well remembered and even loved, but turning that into a profit required hawking each serial around the world in the hope of getting international broadcasters to invest.

Only for the “Big Four” (ABC, ATV, Granada, Rediffusion), later the “Big Five” (ATV, Granada, LWT, Thames, Yorkshire), could expect to make megaprofits no matter what they produced, thanks to the monopoly they had on the richest regions of England and the power over scheduling they possessed and used to the advantage of their own programmes. Even then, the original Big Four had to pay to start the network itself, with ABC, ATV and (Associated-)Rediffusion all haemorrhaging money for the first few years of ITV’s operation. Granada was the exception, never losing money but also then failing to profit when the popularity – and the takings – of ITV picked up after 1958. For Granada, the fear of having their entire operation – cinemas, television and rental – pulled down by the loses saw them make something of a reverse Faustian pact with Associated-Rediffusion: AR would ensure that Granada didn’t make a loss in its first years if Granada would ensure that AR made a profit in later years. Granada indeed didn’t lose money, and the millions they later paid into AR’s coffers because of it must have hurt.

All this is not to say that the regional ITV system was a failure – quite the reverse. Only one company ever went bankrupt; some seemed to circle the drain but no one except Teledu Cymru ever went down it. In the good years, it was truly a licence to print money. In the bad years, things were bad for many of the companies. Good and bad managements came and went. Some people made fortunes, some merely a salary. In many ways, the story of ITV is simply the story of any other business.

You Say

3 responses to this article

Dave Rhodes 17 February 2015 at 11:11 am

Is that Graham Roberts doing the authority announcement in the linked audio? His work at Grampian was mentioned in seemingly every obit when he died, but this is the first example I’ve found.

Kif Bowden-Smith 17 February 2015 at 8:39 pm

Yes I believe so, though I was living in ABC / Granadaland at the time!

Jason 12 April 2021 at 6:36 am

The piece does fail to mention that Tyne Tees all but collapsed in 1970,and would have done had the tie-up with Yorkshire not happened. The company had a very bad six years between 1968 and 1974 and only truly started to improve in around 1977. The result of being a very awkward size – large enough to have significant facilities and commitments to network production; serving a region important enough that local figures demanded good local representation; but simply didn’t have the finances to truly make a go of things. They did come good as an independent in the 1980s,although even then the finances were stressed at a company that was, by some margin, the smallest of the “network producers”.

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