Turbulent times

What has happened

Television companies are facing the fiercest competition they have ever encountered, and the challenges for the terrestrial or traditional broadcasters are growing by the day with the explosion of new satellite channels.

The BBC is in the process of setting what is being regarded by some as its last licence fee, as it becomes increasingly difficult to argue for the licence based on the assumption that everyone watches the BBC.

For ITV the problem is that advertisers now have far more choice and the competition impacts on the amount they can charge for each ad. The company’s share price has disappointed the City since the controversial merger of Granada and Carltoncreated ITV plc two years ago.

What happens next

New financial director John Cresswell, who took over from long-serving Granada veteran Henry Staunton early last month, has joined at a turbulent time, as a £1.3bn private equity takeover bid led by former BBC director-general Greg Dyke failed when the company board rejected it.

But Dyke, supported by Goldman Sachs, Apax Partners and the Blackstone Group, may come back with a renewed offer, and there may be other potential bidders. Roger Parry, who chairs several media firms, ruled it out for the time being after seemingly being poised for a bid launch. But he left the door open by reserving the right to make an offer if circumstances change.

There are also rumours that US giants Viacom and Time Warner have been watching developments closely for some time.

High on Cresswell’s list of priorities, as well as his boss’s, chief executive Charles Allen, is arranging finance for a £1bn ‘sweetener’ for shareholders who were angry about the rejection of the Dyke takeover. Non-core assets such as 10% stakes in Arsenal and Liverpool football clubs, and Carlton Screen Advertising could be sold.

There might also have to be budget cuts at ITV1, with the company resorting to increased use of US dramas and producing less of its own programmes.

Cresswell, who is ACA qualified, will be very familiar with the issues facing television companies needing to cut costs having worked in senior broadcasting roles since 1987 (see his CV above). He was also the company’s chief operating officer from the time of the merger.

SO FAR SO GOOD

John Cresswell's CV

1987-1992: Financial controller TVS Television

1996-1998: Finance director Meidian Broadcasting Limited

1992-2000: Chief operating officer

2000-2001: Director of operations Granada Content

2001-2004: Chief operating officer and FD Granada Content

2004-2006: Chief operating officer, Granada and ITV

March 2006-To date: Financial director ITV