Hundreds on block in Granada/Carlton tie-up

LONDON — The soap opera that is the £4.6 billion ($7.8 billion) merger of ITV’s two big shareholders, Granada and Carlton, is heading for another cliffhanger as some of Blighty’s most experienced television practitioners wait to discover if they will keep their jobs.

ITV will be listed on the U.K. stock exchange on Feb. 2, subject to shareholder approval. But the new structure of the company will not be in place until June.

As rivals weigh up their chances of remaining on the payroll next summer, fear and loathing is trickling down from the boardroom to the workforce.

“No one is doing any work because people are thinking about how they can get the best possible payoff,” says one senior production executive who may be in for the chop.

“The headhunters are asking us to do psycho-symmetric tests and three-hour interviews for jobs we’ve been doing for years,” he adds.

Like all corporate weddings, the overwhelming logic of the Granada/Carlton union is to cut costs — officially around $80 million, but the real figure may end up being as much as $120 million.

“The more cuts that Charles Allen (ITV’s CEO designate and Granada chairman) can deliver, the greater his chance of surviving,” reckons a Granada veteran.

Inevitably much of these savings will come from weeding out staff at all levels of the two separate entities to create a streamlined ITV plc — Granada employs 4,696; Carlton has 3,000 staff. For once the talk of rivers of blood is not exaggerated.

Carlton’s chairman, Michael Green, was forced out of a similar position in the merged ITV last month following City pressure.

Last week Allen, the man in charge of the merger, emailed employees to reassure them that everything is being conducted by the book.

“We are currently working through a selection process for senior management appointments,” he said.

“A highly experienced external assessment consultancy is advising us, so candidates can be confident of a fair and transparent selection procedure. This also ensures that ITV will get the best person for each job.”

His email coincided with the news that Granada plans to mothball its Manchester HQ, scene of the Beatles first appearance on TV, and move to new premises nearby.

The news has sparked fears that the number of layoffs could be greater than feared and that ITV will become more London-based, at the expense of its regional centers.

However, sources suggest that the retreat from Manchester was well advanced long before the merger was given the greenlight.

Within Carlton, Allen’s words have gone down like a lead balloon.

“We all know that whatever anybody says this is a Granada takeover and from what we’ve seen so far of the new structure it’s designed to favor their people,” says one staffer.

In the last two weeks, staff at the two companies were invited to apply for four of the key creative jobs — head of factual and entertainment, head of daytime and lifestyle, head of drama, children’s and arts, and head of Granada USA. These posts are expected to be filled by Christmas.

The top ad sales job has already gone to a Granada’s Graham Duff, after a head-to-head battle with his Carlton counterpart, Martin Bowley, and the betting is that Granada people will secure these key creative jobs.

“Within Carlton and Granada there are at least five well qualified people who could do the drama, children’s and arts job,” says a Carlton insider.

“But it’s significant that the position is called director of drama, children’s and arts. Granada already has someone with exactly that title. Draw your own conclusions.”

However, the truth is that program for program, Granada’s record of achievement, based on almost 50 years of experience, is a lot more impressive than Carlton’s.

A Granada executive says: “No one can be sure if they will still have a job in six month’s time — not even Nigel Pickard.” Pickard is ITV’s still unproven director of programs who works at arm’s length from Granada and Carlton at the network’s commissioning and schedule operation.

“But I’ll be surprised if many Carlton people survive. There’s no one fighting their corner.”

Meanwhile, Carlton and Granada have agreed terms negotiated with advertisers promising not to abuse their market dominance. The deal addresses concerns about the power of a merged ITV raised by the competition commission in its report last month.

The combined ITV will control more than half the U.K.’s commercial TV advertising market.

To counter fears that it could exploit its commanding position, ITV will have to “roll over” existing prices for advertisers, safeguarding against price inflation.

The undertakings also require Carlton and Granada to make guarantees of fair treatment to the other ITV licensees — Scottish TV, Grampian TV, Ulster TV and Channel TV — which will together own 8% of the network.

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