Granada Warns Of ITV Disaster

Granada has warned of dire consequences for ITV and ONdigital if the changes to media ownership rules are delayed for at least another two years, as seems likely following the opening of Parliament last week (see Communications Bill On Hold This Year). In a leaked correspondence published in this weekend’s Sunday Times, Granada chairman Charles Allen and CEO Steve Morrison told the government that as a consequence of the delay, Granada may be bought out by a foreign company and ONdigital closed due to its financial difficulties.

In the letter, Allen was said to disclose that he had already received approaches from foreign investors, tempted by Granada’s increasingly depressed share price . Denied the possibility of the planned merger with Carlton, Allen said that fending off such bids may not be possible, especially as delays to the bill are likely to further reduce the companies share price.

Another consequence of the delay could be the end of Carlton and Granada’s financially draining digital TV business, ONdigital. The Granada chairman warned that even if independence was retained, shareholders’ tolerance for pouring money into the project may not be. Such a move would mean a serious dent in the government’s plans to achieve enough digital penetration to switch off and subsequently sell off the analogue signal.

The co-signed letter ended with a plea to the Prime Minister to find a way of removing the restrictions on the ITV companies during this Parliamentary session, which ends in July next year.

Granada: 020 7620 1620 www.granada.co.uk

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