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No. 38: Granada

London/Manchester

Revenue: $1.707 billion

Profit: $365 million

There was a time, not long ago, when Granada could do no wrong. But since the company established itself as top dog in Britain’s commercial ITV network a year ago by buying three stations from United News & Media, there has been little but bad news.

Granada’s stock has tracked relentlessly downward, hammered by an advertising recession after last year’s dot-com bubble, and by the heavy costs of digital television.

The company suffered another blow when the U.K.’s newly re-elected Labor government decided to stall on allowing the final consolidation of ITV into a single company.

To make matters worse, there was a PR disaster over the leak of a letter from Granada’s normally sure-footed chairman Charles Allen to Prime Minister Tony Blair, in which Allen prophesied doom if Granada were not able to merge with its main ITV partner and rival Carlton.

The digital terrestrial platform ITV Digital (rebranded from ONdigital), jointly owned by Granada and Carlton, has so far sucked up over $1 billion, and isn’t due to break even for another three years. A third partner is being sought to share the burden.

Meanwhile, with ad revenue down 11% in the nine months to June and showing no signs of picking up, Granada has been restructuring and cost cutting. The international production business has provided little cheer, with the company being forced to rethink its operation in Australia, and making little headway with series orders in America.

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