Whatever the new management achieve, ITV is back
Raymond Snoddy says that the arrivals of Archie Norman and Adam Crozier have been marked by an auspicious turn in ITV’s fortunes …
With the possible exception of Nick Clegg, Adam Crozier – who takes over as chief executive of ITV on Monday – has to be one of the luckiest people in British public life.
Not only is he escaping the Neanderthal reactions of some of the Post Office trade unionists to very necessary modernisation, he is arriving just as the rising tide is lifting both advertising revenue and the ITV share price.
With the World Cup to come, by Christmas both Crozier and his boss, the ITV chairman Archie Norman, are certain to be seen as miracle workers by the City.
Extraordinary things are happening. Brokers are putting out buy notes on ITV. Who would have thought?
Last month came reports that a large UK media buyer thought ITV advertising would be up by 29% in April. The reality is probably closer to 20% but an annual rise of more than 10% is no longer considered over-exuberant.
Serious potatoes are involved with each 1% increase in advertising revenue equating to around £14 million in extra operating profit for ITV.
The company is winning advertising share, is back in the black and is ahead of target on promised cost cuts.
Surely the old regime of John Cresswell, the acting chief executive, and his chairman Michael Grade, must have been doing something right.
Once the share price hit a laughable 18p. Why oh why did Five owners RTL fail to pounce then, or indeed why did Greg Dyke, who once thought ITV worth 130p a share, not return to the fray.
Now ITV shares have reached the heady heights of 68p, making serious money for those who believed that the days of traditional commercial television were not over.
You don’t have to be an incorrigible optimist to look at 80p and maybe even 100p in the medium term.
A further boost on the general state of the advertising market came this week from the IPA’s quarterly Bellwether report and with it a dramatic headline.
Marketing spend is up for the first time in two and a half years and companies remain upbeat about financial prospects and plan to continue raising their spending this year.
The World Cup should provide an additional boost. Sir Martin Sorrell tells us so.
Not only is it taking place in “UK time” but England have at least a decent chance of progressing to the later stages.
But history suggests a problem. Last time, buyers brought forward their spending, afraid that rates would soar for the World Cup and that they would be ripped off. In the end the World Cup turned out to be a damp squib financially for ITV.
One of the first jobs for Adam Crozier, a former chief executive of the Football Association, should be to ensure that the right incentives and packages have been put in place to prevent a recurrence.
If the Norman-Crozier arrivals have already been marked by an auspicious turn in ITV’s fortunes, the task will now be to produce a plan for the next five years of the broadcaster.
The trouble with plans is they are a lot easier to draw up than implement.
Charles Allen had a plan that was perfectly sensible apart from the Friends Reunited adventure.
Michael Grade also had a plan that placed great emphasis on expanding international production but not, apparently, on achieving a deal with the “parasitic” Google.
Norman in his four months in charge has been taking a surprisingly active, hands-on role, popping up everywhere in ITV and holding “listening” groups to hoover up staff ideas.
Neither Allen nor Grade were noted for the amount of time they spent away from the executive floor.
Norman is said to have already mastered his brief and has been asking tough questions all over the place.
The signs so far are good. He has already expressed scepticism, rightly, about the retreat from regional television. There has to be a better way to provide competition to the BBC than the clunky solutions suggested by the political classes.
It looks like there will be at least three major strands to the plans of the new regime, none dramatic but still easier to say than do.
One is finally trying to break down the historic regional and sectoral divisions in ITV and get all the staff heading together in one direction.
Another is clearly to give greater emphasis to the internet and social networking but without making gigantic acquisitions of the sort than come associated with enormous risk. Think Bebo.
A way also has to be found to boost ITV production outside the UK. Easier said than done because ITV has historically underperformed – even compared to the BBC. The old ITV barons much preferred competing with each other than taking on the world.
Archie Norman and Adam Crozier should also have the ambition of persuading the marketing companies that the CRR is actually damaging them by hobbling ITV’s programme-making ambitions, and with it their ambition to assemble mass audiences in an age of fragmentation.
But already we can say, whatever the new management achieve, ITV is back.