ITV’s last picture show: Britain’s creative industries should be better protected, says
There is a lack of clarity as to which of Andy Burnham’s ‘brains trust’ of economic advisers will emerge as most influential.
All three of them, former Bank of England chief economist Andy Haldane, the last Office for Budget Responsibility chairman Richard Hughes and Goldman Sachs refugee Jim O’Neill, have big footprints.
Speaking at the British Chambers of Commerce, where he is the president, Haldane recognised a current blight on British enterprise and innovation in the shape of a never-ending series of foreign takeovers.
It is an issue this paper has highlighted for almost two decades, under all shades of government.
So it was fascinating to hear Haldane argue that Britain ‘cannot afford to allow the continuation of overseas stripping of our greatest growth asset: innovative businesses’.
Two marquee British firms are in the limelight: ITV and Easyjet (of which more below). ITV is in rude health and under the leadership of Carolyn McCall spotted the digital opportunity, and backed the group’s studios arm.
Cliffhanger: Lawyers are finalising a deal that would see Sky-owner Comcast buy ITV’s broadcast and streaming unit for £1.6bn
Yet there has been scant recognition from UK investors. When investment was poured into ITVx, the streaming service, the shares plummeted.
The solution being sought is separation of ITV’s media and entertainment division from production.
Sky has been courted as a partner and, finally, after many torrid months of negotiations, a £1.6billion price reportedly has been agreed.
Sky owner, American cable and movie giant Comcast, has reason to be cautious. It overpaid for Sky and was required to make a £7billion write-down.
The complications of an ITV deal are regulatory. ITV has a broadcast licence which lays down strict rules on regional content.
There also will be questions about the future of the broadcaster’s news contract with ITN, in which Daily Mail owner DMGT has a stake.
Sky’s obligation to run a 24-hour news service expires in 2028 and some reshaping will be required.
The World Cup underlines ITV’s ability to capture enormous audiences with 16m-plus tuning in to England v Croatia and pre-tournament ad sales up 30 per cent on the Euro 2024 football tournament.
If the deal goes through, ITV Studios will remain as a stand-alone production house and producer of America’s most popular show of the year Love Island USA as well as Disney+ blockbuster Rivals.
The infusion of capital from Comcast would provide some extra firepower.
Nevertheless, running down any part of our world-leading creative industries should never happen.
Easy win
The British Isles have been pioneering in building robust no-frills carriers.
It was the vision of Sir Stelios Haji-Ioannou which conceived Easyjet, flying to European destinations and beyond.
And Irish entrepreneur Michael O’Leary found a way of moving people around Europe more cheaply than others,
Ryanair exploited secondary airports and broke down fares into their constituent parts.
If private equity group Castlelake were to be allowed to buy Easyjet, with the backing of former Malaysia Airlines bosses, it would rob the UK and the FTSE 100 of an innovative stalwart.
It is shameful that the Easyjet board should even consider opening its books to due diligence, with a feeble £4.9billion on the table. Fortunately, it should be simple to thwart.
If Castlelake and friends think that they can make a turn in troubled skies, then EasyJet and its board, with a wealth of experience, ought to be able to see them off the field of battle and grasp the value for investors.
Founder Stelios and his family are in no hurry to surrender their 15 per cent or so stake unless the price is so high it becomes
irresistible. The buyers will also need to find a way to navigate EU rules on ownership of airlines.
There should be no surrender.
Head start
Is Keir Starmer’s respected business adviser Varun Chandra plotting an exit?
City speculation is that he is forming an investment company and has managed to persuade none other than Tony Blair to serve as chairman. Big catch, if it flies.
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