Brit’s TV picture fuzzy

Pearson’s $ 152 million bid for Thames TV could mark a significant shift in the balance of power within British television.

Hitherto, the commercial TV map, redrawn after 1991’s bruising ITV franchise auction, looked set to be dominated by Carlton. The London weekday station is linked by cross-holdings and trading agreements with fellow franchisees Central, LWT and GMTV as well as news-provider ITN.

But the Pearson/Thames deal, which already has been accepted by majority shareholder EMI and follows disclosure of talks for a management buyout of U.S. subsid Reeves Entertainment, signals the emergence of a rival power block.

Pearson already owns 14% of ITV station Yorkshire/Tyne-Tees and 17% of satellite broadcaster BSkyB, which, with Channel Four, is ITV’s main commercial rival. Thames, which lost its ITV franchise to Carlton, is part owner of another satellite channel (and ITV rival), U.K. Gold. In addition, it is the largest commercial shareholder, with 9.6%, in satellite operator SES.

This spread of holdings would make Pearson a substantial player in any event. But what makes it a serious potential rival to the Carlton Group is its close relationship with fellow BSkyB shareholder Granada, which owns the lucrative ITV franchise for the Northwest of England.

Granada, Thames and Yorkshire/Tyne-Tees are the powerhouses of commercial program production in the U.K., supplying about half the entire ITV program schedule. Among their shows are proven audience-pleasers “Coronation Street, “”The Darling Buds of May” and “The Bill.”

The fact that Granada and Pearson are also major players in BSkyB (whose program chief is former Thames stalwart David Elstein) must give them leverage in their dealings with the rest of the ITV web, especially when it comes to setting prices for their top-rated shows. Adding to ITV’s discomfort is the fact that, as an independent producer, Thames would have no qualms about taking its wares to the BBC or Channel Four.

The Carlton Group is wedded to the ITV web and is stronger in broadcasting than in production. Pearson and Granada, by contrast, have much wider broadcasting interests and are notably strong in production. Their growing influ-ence could redress the imbalance that has hitherto existed between the all-powerful broadcasters and the U.K.’s relatively weak produc-tion sector.

While it has long been apparent that Thorn EMI wanted to get rid of its majority stake in Thames, Pearson’s motives for acquiring the company are only slowly emerging.

Pearson boss Lord Blakenham said last week that the company’s aim is to “increase our involvement in the visual media … Thames will play a central role in the development of our television strategy.”

The market suspects that Pearson, whose interests range from theme parks and oil services to newspapers, could soon dispose of its tableware subsid, Royal Doulton. Further disposals could result in a group that has a much stronger leisure and media focus, especially in newspapers and TV.

If Pearson uses Thames to acquire smaller production companies and program libraries, the U.K. industry could soon play host to a substantial independent production company for the first time. That in itself would be a major development.

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