Losers search for the silver lining 

31 May 2018 tbs.pm/66349

From Broadcast magazine for 25 September 1992

THE FADING white spot and high-pitched hum used to signal the end of each evening’s viewing for legions of TV junkies.

It is now four ITV companies who are facing the same unavoidable close down.

Thames TV, TVS, TSW and TV-am will cease broadcasting as Channel 3 companies in the early hours of New Year’s Day, 1993.

It is much too late to start formulating new policy, but have the four losers done everything possible for a profitable shut-down?

Thames, London’s outgoing weekday franchisee, is the most upbeat of the four on ‘death-row’. With City TV in Toronto, it is bidding for the licence to run a fifth terrestrial service, Channel 5, and plans a joint satellite channel with the BBC, UK Gold. And Teddington studios may stay a sizeable facility and the headquarters of a new production company — the UK’s largest — which has already sold programmes worth £28.9 million [£59m in 2008 prices] to ITV for 1993.

Lord Brabourne, Thames TV chairman, said when the franchise was lost that Thames would change its policies to transform the group’s activities and maximise shareholder value. A Thames spokesman said the company had put all its efforts into retaining revenue while reducing costs in 1992.

Derek Hunt, Thames’ finance director, said the company had paid loyalty bonuses to key sales and other staff not to jump ship. But the payroll has been significantly reduced in city areas.

The latest interim results to June 31, 1992, show compared to the same period in 1991 expenditure on programmes dropped to £86.8 million [£177m] from £91.4 million [£187m], operating expenses to £45.1m [£92m] from £53.6m [£110m], but profits after tax and levy rose to £8.7m [£18m] from a loss of £4.28m [£9m] in 1991.

Hunt expects an increasingly profitable C3 finale for Thames — city brokers believe the company’s 1992 profit may be as high as £36m. [£74m]

TSW represents the other end of the scale, with no visible plans for survival. At the company’s last AGM in June, chairman Sir Brian Bailey confirmed that TSW was considering a reverse take-over. The move would mean TSW taking over a company of similar size but handing over running of the newly merged unit to its partner.

Ivor Stolliday, TSW chief executive, said the outgoing South west licensee had already implemented the policies to steer it towards closedown.

The company has cut staffing levels from over 300 last October to less than 150, has slashed whole departments including publicity and public relations and transferred its air-time sales to TVMM, but has not reduced programming budgets.

Stolliday said: “Advertisers always lose interest in outgoing franchisees.”

Despite all the cuts, Stolliday believes TSW’s final end of year results will be down on the general network trend, although not drastically.

The future of TVS is a little clearer following an offer from US cable company. International Family Entertainment, to buy its assets in the new year for £38.2m. [£78m]

Cost-cutting measures have helped TVS to a half yearly profit to June 30 of £7.6m [£16m] compared to a loss of £11m [£22m] same time last year.

TV-am chairman, Bruce Gyngell, has said little about his company’s ITV close-down after flirting with a Channel 5 bid and even offering TV-am’s programming output in full to Channel 4.

However the company is in a joint venture with Richard Branson’s Virgin to launch the first national commercial pop radio station, which is to start next Spring.

Gyngell has hinted that part of the Camden Lock studios may remain open in 1993 as a facility.

Audiences for TV-am have hit record highs since it lost its franchise and reduced news content. Viewing figures have grown steadily since October 1991 hitting 20 million for the week ending April 12 this year.

After losing its franchise it took the immediate step of scrapping its news gathering team and giving the contract to Sky TV. The company cut 120 jobs on its news team.

TV-am estimate a saving of £18m [£37m] out of a total cost base of around £60m [£123m], through the Sky News deal and redundancy programme. In June an investment survey predicted that the company would earn £85m [£174m] in net advertising revenue in 1992. In 1991 the company’s turnover was £79m [£161m].

“I am not thinking about the future. We still have millions of pounds of business to do as a C3 licensee,” said Gyngell earlier this month.

Thames survives as an independent producer, having changed hands several times and now being part of RTL. TV-am‘s studios were sold to MTV Networks and the remaining shell company was reversed into Crockfords plc, which is now defunct. TVS was sold to International Family Entertainment, which is now part of Disney; when Disney took over, they accidentally discarded all of the TVS paper archives, losing track of programme rights. TSW was reversed into White Ward Group to form UK Safety plc, a manufacturer of workplace safety gear; the company went into administration and was dissolved.