Grade quits CEO role
Michael Grade, currently executive chairman and chief executive of ITV, is stepping down from the CEO task. He’ll stay on as non-executive chairman “as planned”. In fairness, Grade always said his chief executive position was likely only to last for some 2 years. But the downside is that his tenure has seen ITV’s value tumble catastrophically.
Grade was appointed in November 2006, and took up his new position at ITV in January 2007. He was formerly chairman of the BBC (April 2004-Nov 2006). ITV will now seek a replacement by the end of this year.
ITV’s formal statement said: “The Company is now implementing a number of further initiatives, including the decision to dispose of its wholly owned subsidiary, SDN, and has agreed terms for covenant-free financing to raise an additional £58m. ITV’s programme schedules continue to perform competitively and operational progress is being maintained.”
“It is the Board’s view that, taken together and ahead of important regulatory decisions expected towards the end of the year, these actions are appropriate in this uncertain market. The Board further believes that the company has adequate liquidity as it stands today and is therefore able to confirm it has no current plans for a rights issue.”
“In the light of the regulatory timetable now expected, Michael Grade has recommended to the Board that the conclusion of the regulatory reviews will be the right time for him to relinquish his executive responsibilities and become non-executive chairman, as planned. The Board has agreed with this recommendation and accordingly will now commence a formal search for the next CEO.”
ITV has suffered badly from the economic crisis, with advertising falling badly on its main commercial channel. At the same time ITV has suffered what has been seen by the financial community as being under near-permanent threat of some sort of foreign take-over, not helped by a 17.9% stake in ITV owned by BSkyB, which is seen as something of a share overhang.
Grade has already seen some 1600 jobs cut, and another 600 are likely to go this year and make further savings from its programming budgets.
On April 20 it emerged that Mr Grade’s lawyers had issued a High Court Writ against Times Newspapers (publishers of the London ‘Times’ and owned by News Corp) in reference to a ‘comment’ piece written by the BBC’s former Director General Greg Dyke, which was highly critical of Mr Grade.
To further muddy the ITV waters, the rumours and reports of potential buyers of the broadcaster continue on a near-daily basis. This week it has again been Mediaset’s turn to be the subject of conjecture as a possible purchaser. If Mediaset is a buyer then yesterday’s share price for ITV was at bargain basement prices, down another 4% to 30.75p. ITV’s market capitalization is £1.19bn. Of 19 market brokers, 8 are neutral, 4 are sellers and 6 are recommending “strong sell”.