Michael Grade to step down as ITV chief executive

Michael Grade is set to step down as chief executive of ITV before the end of the year to become a non-executive chairman and allow the broadcaster to bring in a new chief exec.

Grade’s decision comes after reports last month that ITV shareholders were pushing him to take a step back in return for pumping more money into the channel.

However, in a statement today ITV said it would not need to raise money from shareholders.

The commercial broadcaster said that Grade would stand down after Digital Britain and the conclusion of the Contract Rights Renewal (CRR) regulatory review process, which is expected to be complete by the end of the year.

ITV is starting its search for a new CEO immediately and will look to appoint someone “as soon as practicable”.

In March, ITV announced total losses of £2.7 billion after a huge downward realignment of its asset valuation – the broadcaster reported a pre-tax profit fall of 41% in 2008 and a 20% decline in TV ad revenue in the first quarter of 2009 (see Can ITV survive in the short-term?).

As a result, ITV was forced to cut programme budgets by £1 billion – £65 million this year and a further £70 million in 2011 – and 600 jobs.

At the time, Grade said that the “current conditions in the television advertising market are the most challenging I have experienced in over 30 years in UK broadcasting”.

ITV announced plans to save £155 million this year, rising to a total saving of £175 million next year and £245 million in 2011, through a variety of cost-cutting measures including redundancies.

The broadcaster has already made 1000 job cuts in the year to February 2009, which has seen its total headcount reduced from 5,500 in early 2008 to 3,900 by this summer.

Last year proved to be tough for all broadcasters, with all terrestrial channels recording a year on year decrease in commercial revenue, however, ITV1 was the worst affected after a 19.5% revenue fall compared to December 2007.

However, it’s not just the recent economic downturn that has hit the broadcaster, as ITV1’s revenue, audience share and CPT has followed a downward trend since 2004, with a direct correlation to its declining share price, which has plummeted dramatically since 2007, due to more money going online and the global advertising collapse, to a low of 22.5p in March.

At the time, the broadcaster claimed that “the [ITV] Board remains confident in the long-term course for the business set by our content-led strategy”, however, ITV has slashed £65 million from its programme budget this year alone.

In a statement, released at the time of ITV’s financial results, Grade said that the broadcaster has been forced to take “tough action” due to the unprecedented conditions.

However, ITV may be able to benefit from Alistair Darling’s investment plans for the media industry, which he announced as part of The Budget Report yesterday (see Darling: Media industry to get £2.5b public fund).

The Chancellor claimed that the media, telecoms and creative industries will gain access to a new £2.5 billion public fund, which he said will “encourage investment in the industries and high-paid high-skilled jobs of the future”.