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 is likely following the opening of Parliament last week. 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 down altogether.
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 company’s 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 loss-making project may not be. Such a move would mean a serious blow to the Government’s plans to achieve sufficient digital penetration to switch off analogue broadcasts and subsequently sell the spare spectrum.
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.
