Harley Street might help steer ITV back to good health
At least you can’t accuse ITV of not trying.
The colour advertising spreads promoting its new drama Harley Street were everywhere yesterday. We will know today whether ITV has managed to engineer that increasingly rare phenomenon, a new drama hit.
At least the Radio Times made it Pick of the Day and noted that while it was the normal medical tosh, it was also high-class tosh with lots of sex and posher undies than average. The legend read, “Harley Street – in sickness and in wealth.” Never mind the drama. Which is it going to be for ITV?
The share price is still on life support and no-one should be fooled by the slight increase in pulse rate that has taken the stock all the way up from 38p to 43p this week.
Whatever portion of that rise was caused by Big Brother baron Jon de Mol’s refusal to rule out an interest in ITV can safely be discounted. The co-founder of Endemol was part of a consortium which bought the company from Telefonica last year for £2 billion – close to the top of the market.
Berlusconi’s Mediaset is in there, as is Goldman Sachs. The only thing anybody needs to remember is that the banks which stumped up the money with only light covenant obligations have been unable to syndicate the loans in the normal way. One bank has even been reported as selling on the debt at a 30 per cent discount.
Unless de Mol is prepared to risk a large part of his own fortune – an unlikely prospect- then at least one “potential” bidder for ITV bites the dusk. Haim Saban has money from both Power Rangers and the sale of ProSieben in Germany and is a close associate of Endemol chief executive Ynon Kreiz. It still sounds more like the plot for a fictional corporate drama than reality.
RTL, owners of Five, might make a move but the company has always been desperately cautious in the past. The arrival of Dawn Airey on the RTL board might just change that.
The position of NBC/Universal in the US is even more interesting. Owners GE have just insisted that the television network and studio business will remain an integral part of the organisation. Whether that commitment would extend all the way to a near £2 billion foreign adventure is questionable.
Who else? Apax once thought ITV worth 130p so logically… The production business alone must be worth 40p a share in a breakup.
But with credit markets completely seized up it is difficult to see where the money would come from. While an unexpected dramatic turn can’t be ruled out the truth may be more mundane. As a distinguished ITV broadcaster put it this week: “we’ll probably muddle through – after all there is now a nice suite of channels.”
A couple of hits would also help, and Harley Street a decent place to start the pursuit of wealth.