Saving ITV 

29 March 2024 tbs.pm/80593

 

Independent television staggers from crisis to crisis, from scandal to scandal, from humiliation to humiliation. On its tombstone, when its end finally comes, will be carved the words, ‘They had a licence to print money,’ and: ‘ They gave the public what it wanted.’

 

Cover of The Listener

From The Listener, dated 18 September 1969

Milton Shulman puts the case against ITV at its crudest. Behind the shrill hyperbole lies the clue to the bad press endemic to the commercial companies. ‘Triviality’ and ‘greed’ are the handiest words for any critic composing his latest piece of excoriating prose. Like the BBC, ITV must live with its past: consequently the proposition that ITV is worth saving, that it can and may save itself before 1976, raises eyebrows in a way unthinkable if one were talking about the BBC as at present constituted. Anyone working in ITV is assumed to be in it for the money; their arguments that competition has brought a wider public participation than the old middle-class BBC would have done, that ending monopoly control of employment and patronage in television fortified both technician and artist, are shrugged aside. The companies are assumed to be hell-bent for profit-maximisation; any thought that the relationship between the companies, the public and the ITA has changed and is changing fast gets dismissed. Nothing changes, we are told, except the snouts in the trough.

The extraordinary story of London Weekend Television is now adduced as the final argument of the incorrigibility of ITV. Nothing but the grave will cure the hunchback. On the contrary, I believe that what is happening in Old Burlington Street may, by illustrating the breakdown of the old assumptions about financial return, allocation of franchise and executive control, be the prelude to a reappraisal of what ITV is all about in 1974 or 1976.

After their losses in the first years of operation, the original contracting companies amassed large profits for which they paid a rental to the ITA and nothing more. The image remains as a kind of doppelganger to haunt their successors. Clive Jenkins, burrowing through the boardrooms in 1961, met a response unthinkable today. An executive of Rediffusion, asked about criticism of his company by the Observer, felt able to reply: ‘The Observer‘s attitude? I don’t know. What is its circulation? One-seventh of the TV Times? And we have only been going three years.’ He is not going now. In 1961-2 the companies had made a profit before tax of £28 million [£497,500,000 in today’s money, allowing for inflation – Ed] — a return for many of them of over 75 per cent per annum on capital. Control over programmes of indifferent quality was vested in an Authority whose officials were still more concerned with breathing life into the monster than with questioning what it was doing. The Chairman, Sir Ivone Kirkpatrick, in the discreet words of a former Secretary of the ITA, ‘took the system as he found it. As a result the programme contractors were hardly aware of the activity of the Authority in any dynamic sense.’ It was this period of uncontrolled profits and programmes, and the strictures it drew from the Pilkington Committee, which fixed the public stereotype of ITV.

 

Two men behind a cluttered desk

London Weekend Television surfaces in June 1967: Michael Peacock and Aidan Crawley, Managing Director and Chairman of the company, who are now reported to be in conflict, meet the press

 

But a great deal has changed. Under the 1964 Television Act the powers of the ITA were increased to emphasise its role in protecting programme standards. That, however, was to be a change slow in maturing. More dramatically, Postmaster General Bevins braved innumerable pressures from his colleagues to put on the television advertising levy — paid directly by the companies out of revenue to the Exchequer. The companies now had to pay for their public concession to earn advertising revenue. All screamed, but none starved. Dire threats that companies would not re-apply for their contracts in 1967 came to nothing.

Up to this point the companies at least had security of tenure. In 1964 all the existing contractors were confirmed for a further three years, later extended to four. Kirkpatrick had indeed said, in the ITA evidence to Pilkington, that ‘television companies become established in the same way as do great national and provincial newspapers, and none could, or would, operate without some security of tenure.’ All this was thrust aside by Charles Hill, when he was appointed Chairman by Bevins in 1963. He intervened far more in what was to be transmitted, and when. In 1967 he created two entirely new programme contractors and one shotgun marriage, disposing of TWW and — effectively — of Rediffusion in the process. In its Annual Report the Authority makes it clear that this was done partly because otherwise ‘it would mean that the companies already appointed were there for all time,’ and that ‘the process of inviting and assessing applications was a formality.’ In removing this assumption at least, the re-allocation of contracts was a total success.

Independent Television had been mocked by false dawns before, but never more so than in 1968. The new contractors trumpeted their claims, in a crescendo of oversell. Critics accepted that ITV would become a second BBC overnight, without asking either how it would be done or whether that was the object of the game. And everything went wrong. The companies were now in a financial corner. Advertising revenue was falling in the recession. It is falling still. Some of the major advertisers are reported to be cutting their television expenditure by six-figure sums. Capital expenditure was going up. The companies have to convert to colour transmission. Many of them are building entirely new studio complexes. The government increased the levy in its last Budget at exactly the moment that these costs were biting hard. The companies will now be paying around £29 million [£422m] to the Exchequer, and this is on revenue and not on profits. But that was not all. Lord Hill left behind him, when he departed to shake up the BBC, a chronic insecurity, perhaps the inevitable corollary of violent change. Insecurity among the thousands whose working lives were altered by the carve-up of the contracts was part cause of the strike which crippled ITV at the start of the new contracts, a strike which satisfied no one and achieved nothing. Insecurity in the boardrooms followed the revelation that contractors were living, literally, on borrowed time. If a contract can vanish in 1974, if immensely expensive capital equipment is being installed for a short working life, the obsession with rate of return on capital becomes intense. Ratings are scrutinised, budgets checked, revenue boosted, with a terrible zeal.

This is the background to the present debacle at London Weekend, to the doubt, hesitation and pain. The glamour of the sufferers should not obscure the general pattern of which LWT has become the paradigm. Wherever one has friends in the companies, tales of woe accumulate: programmes cut back at Harlech, closure of the Edinburgh office of Grampian, talks on collaboration between Yorkshire and Anglia, Westward and Southern. For some of the smaller contractors the shoe pinches quickly. Even with the memory of the good years there were no competitors for six of the smaller franchises in 1967.

In its agony of indecision, poverty and feuding, however, London Weekend can stand for all that has gone wrong. Aidan Crawley and David Frost had produced a handful of aces in 1967: the now notorious application document, with its proposals for civilising the weekend; a cluster of successful BBC executives under Michael Peacock, the man who first made BBC-1 a competitive service with ITV; and the programme associates of Mr David Frost, who had hit the knack of bridging the gap between light entertainment and current affairs in a single programme. There was, they said of their proposal, ‘no reason why the people who knew about TV, cared about TV and did TV should not have an effective voice in the running of that company through a substantial equity holding’. No, indeed. Yet things soon went wrong for the people who knew about TV. Their programmes were not as good as they hoped; the critics turned against them. You can survive the critics if you have the ratings. Those too slumped.

It was clear that the company was doing badly financially, worse than ITV generally. The previous contractor for the weekend (then two days), ABC, had done handsomely, but it had had the Midlands weekday contract as well, and its forte had been light entertainment [Whitehead suggests here that ABC had London weekends and Midland weekdays. He is wrong. – Ed]. ATV was still doing well, serving up its traditional mix. The boardroom pondered. They had seen the past and it worked. So the pressure grew. Peacock changed his schedules. The shock troops of the Public Affairs Unit were disbanded, not a shot fired. Their protest to the ITA went unheard, as did remonstrations over the difference between what Weekend had become and what its application had promised. It was, said the ITA, the general promise of the executives which counted.

There has been much blood over the dam since then. By the time this article is read the immediate fate of Michael Peacock will have been decided. His lieutenants have produced remarkable unity on his behalf so far among all the production staff. Despite a Conan Doyle element in the declarations of the Company of 13, their threat to resign in a body if Peacock went was desperately serious. They may have saved Peacock this time. But if he goes, and most of them with him, the central issue in commercial television will be out in the open. In a general clash between production executives and financial backers, can the ITA avoid taking sides? What guarantees can it give the former that their attempt to improve programmes will be supported, and to the latter that their money will not be lost? In the post-levy situation of limited profitability for commercial television what obligation does the government have to ensure that they can at least fulfil their duties to the viewing public.

Much depends upon the ITA. Since the departure of Lord Hill it has become clear that he was an exception among chairmen — interventionist, bent on making his mark. In what would appear to be more normal times the Authority is mostly shaped by its chief executive, the Director-General. The present DG, Sir Robert Fraser, is 65 next week. He has been given a one-year extension in his post. He is to the ITA what J. Edgar Hoover is to the FBI, the man who was there at the start, who must take the credit for building up the early structure, and establishing a working relationship with the companies. He has never shown much fondness for interference in their programme policy. It might be expected that his successor would feel that the role of the ITA had changed, and should continue to change, in the direction of intervention — in terms of the spirit, rather than the letter, of the 1964 Act. Rigid insistence that, for example, directors of television companies who are public figures shall not appear on ITV to comment on matters of public policy, shows that the ITA knows the letter of the Act when it sees it. But what will happen if the putsch succeeds at LWT, and the production staff, in a body, appeal to the ITA under Clause 11 (4) of the Television Act, saying they wish the contract to be suspended. Clause 11 (4) reads in part: ‘Every contract shall contain all such provisions as the Authority think necessary or expedient to ensure that if any change affecting the nature or the characteristics of the body corporate, or any change in the persons having control or interests in the body corporate, takes place after the conclusion of the contract, which if it had occurred before would have induced the Authority to refrain from entering into the contract, the Authority may determine the contract.’

The ITA would no doubt argue that this provision is a safeguard against changes in financial control. But at what point ought it to be invoked over changes in production control? Having by its own admission chosen the contractor because of one body of men, the Authority could hardly acquiesce in their wholesale removal by another. Or could it? In such circumstances it would be well for the next Director-General to be an interventionist. The names of Mr Alastair Burnet, and of the managing directors of the larger ITV companies, are being canvassed. None is thought likely to accept, yet the choice is crucial if ITV is to survive at the next review in 1976.

 

 

It is to be hoped that, at the next allocation of contracts, the ITA devise some method of balancing power in the boardroom. An unwieldy board with its quota of production or prestige names is useless if effective voting power remains with the financial backers alone. The fiasco at LWT shows how pathetic the equity stake of those who knew about television was in the final analysis. The clear understanding that the continuance of the contract depended upon the collaboration of production executives and financiers might ensure this. The worst the latter could then do would be to pull out, leaving the company concerned to find alternative financial backing.

One further gesture would restore some confidence in the boardrooms as well: to extend the companies’ contracts now for an extra two years, up to 1976, on the very clear understanding that not only they, but the whole future of ITV, will then be assessed. The government, for its part, should consider the use of the advertising levy as an instrument of policy rather than revenue. If it is intended that there should be in this country a commercial television service run on the basis of profitability, then it is hard to see who will benefit if that service is further penalised at its most difficult time. The levy is charged on revenue, with no account taken of how companies have used their profits, how much has gone into capital equipment and programmes, how much ‘diversified’ into other, more profitable enterprises. A levy charged on profits, which took some account of expenditure specifically for television, would at least come closer to establishing that proper relationship between profitability and programme-making which has evaded ITV from the beginning.

In 1976 the government will have to look again at whether it wants a commercial service, probably in the light of another Pilkington Report in 1972-3. In the words of a famous document, ‘Independent Television has the capacity to be as complete a public service as the BBC, by being able to deploy the output of a variety of companies, each with its own character, to make a comprehensible and balanced whole. This depends on two things: that the companies make an effort to ensure that their talents are complementary, and that the machinery for aligning these talents for a total service has effective power.’ That was the LWT prospectus, and very true it is. The companies and the ITA now have their last big chance to make the network system work, by enforcing specialisation, and strengthening the contracting companies as television organisations. It may be that in the process the pure regional ideal, or the principle of trimming over-mighty contract areas, will have to be departed from if the present financial difficulties continue. Yorkshire may yet merge with Anglia, Thames with Weekend.

Perhaps the best result of the current crisis is that it has reminded the professionals themselves of the need to take the lead in improving their companies. For them, as for the ITA, it is very salutary to live on borrowed time. The crisis at London Weekend may prove, ironically, to be the turning-point in the recovery of ITV.

Mr Whitehead produces Thames Television’s ‘This Week’. He writes here in a private capacity.

 

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