The stock price of embattled commercial broadcaster ITV faltered Tuesday as the City, London’s financial district, took in the surprise appointment of ex-BBC topper Michael Grade as executive chairman.
But across much of ITV, there was euphoria that it finally had a new leader.
“It’s fantastic to have a program-maker at the helm and someone who won’t put profits before programs,” said an ITV creative. “If Grade has the courage to say ITV is not going to keep on increasing profits by a continuous program of cost-cutting, ITV finally has the opportunity to become a creative powerhouse again.”
Grade, 63, who will continue as non-executive chairman of Pinewood-Shepperton, expects to run ITV for up to three years.
“I don’t anticipate appointing a chief executive within two years,” said Grade, who has resigned as BBC chairman to join the pubcaster’s chief terrestrial rival.
He ruled out immediate changes to the broadcaster’s creative team and urged “a period of stability and confidence.”
Shares of ITV fell 1.6% to 110.75 pence ($2.16) after rising as high as $2.22 earlier in the day, but there was optimism in the City as the news sank in that Grade had jumped ship.
Paul Richards, media analyst at Numis Securities, said that while his appointment is “not an overnight fix,” Grade has the background to drive a better creative performance and his hiring could prove a “master stroke.”
Analysts believe Grade’s arrival should deter any more takeover bids in the short term, especially as BSkyB, Europe’s biggest paybox, recently bought a 17.9% stake in ITV.
Last week the ITV board rejected a bid from Nasdaq-quoted U.K. cable giant NTL, and in the spring, it turned down a private equity bid fronted by U.K. webhead Greg Dyke.
Grade, who for many British TV types has iconic status after having successfully run Channel 4 and revitalized BBC flagship web BBC1 in the 1980s, said he had accepted ITV’s offer because it was “a career decision” and not because he was frustrated by the government’s protracted negotiations over the level of the new BBC license fee.
Grade will receive a remuneration package worth more than £1 million ($1.94 million), not a fortune by the standards of U.S. media pay packets.