If Mersey Vision went more down the publisher-broadcaster route, proposed a far more leaner operation, had a less regionally biased name and bid a bit less, then who knows?
Bit of confusion, here - the consortium bidding for the franchise in 1980 was called Mersey Vision. Phil Redmond's consortium in 1991 was North West Television.
Yeah, easy to confuse the two. It's the whole Mersey Television/Mersey Vision thing and Redmond's involvement in North West Television.
Though it was the awful bidding format that led to the companies putting in such high amounts to keep their franchises in the first place!
So on the one hand you have companies nearly bankrupting themselves to bid enough to beat their competetors and survive, on the other hand you have Central and Scottish bidding £2000 because nobody went against them, it was a bit of a joke really.
Then you had the fact that some companies had their payments reduced a few years in (like GMTV having their reduced to less than TV-am bid- which makes it feel like they died in vain).
With hindsight, the bidding war turned out to be a bad joke – and reminiscent of the sicker side of Thatcherite economics. There definitely should have been a minimum bid price for each of the regions - calculated using the recent turnover of the incumbents – to prevent Central and STV from offering stupidly low bids of £2000 because they had no opponents. Granada and LWT underbid for their regions by offering less than £10 million whilst their sole opponents put in high bids in excess of £30 million. Did they have inside knowledge that their opponents would fail on quality? To an extent the bidding favoured publisher broadcasters over companies with large in-house production departments because they were in a better position to offer higher bids. Companies with large in-house production departments were faced with a dilemma of an honest bid to leave enough revenue for production (like Thames) and get outbid, or put in a high bid (like TVS) and fail for inability to afford to produce quality programmes in the quantity proposed.
I can’t help thinking that TVS was damned if it bid low and damned if it bid high. The ITC wanted rid of TVS because of irresponsible business practices involving the purchase of MTM followed by huge financial losses.
I seem to remember seeing a news report on the franchise anouncements which showed Phil Redmond storming out of his office and down a corridor on hearing the news he hadn't won.
Well, I've gone back to Under The Hammer, rather than just trying to remember its contents, and it says that Redmond got the fax, at which point "he did not look surprised, nor did he seem disappointed" and then went and sat in his office. A bit later he decided to go and talk to the press, where he smiled, shrugged and said "That's the way it goes". And that was it.
Of course, the best bid in 1991 was the hapless LIB, who bid against LWT, because the night before the bids were due, they finished writing it and then someone contrived to trip over and unplug the computer, and of course they hadn't saved any of it. Then just before they were about to hand it in they realised they'd missed a page out, and had to rush around to find a printer and a stapler.
More essential reading is a great book I am in the middle of at the moment about Granada called The Dream That Died, The Rise And Fall Of ITV by Raymond Fitzwalter, which amongst other things goes into great detail on Granada's franchise battles and their competitors. I will go back and see what it says about Mersey.
Also, please remember - as well as the simple ' think of a number and put how many noughts after it you dare in the envelope', there was also the 'advertising percentage' they had to pay as well.
The amount was decided by the ITC, based on the winning bid, and the projected revenue from advertising in that region.
So, whilst Central and Scottish got away with winning bids of just £2,000 - the advertising percentage levied post winning, were far higher than one that won, say with a bid over of £20mil.
I think Central ended up giving 15% of the total ad revenue back. Some of the higher bidding companies had to pay less than 3% in some cases.
To be fair, it wasn't just a case of pot luck in some cases - some regions bid low because they knew no one was bidding against them. As has been said previously, bidders were generally a consortium of companies. As Central itself was made up of numerous shareholders (including Carlton) they had enough contacts in the industry to be able to pretty much know they would be unopposed.
Just a thought but with both the 1980 and 1991 franchise auctions taking place around the time new commercial channels were being lined up I wonder if there was ever any thought about opening those up to rival bidders.
I guess ITV were powerful enough back then to put a stop to such ideas before they began (and happily back a high brow non-competitive C4), but TV would probably be quite a different landscape today if C4 or C5 had been licenced on a regional basis too (though one of the C5 bids was based on a City TV concept, but from one provider rather than local franchises).
Also, please remember - as well as the simple ' think of a number and put how many noughts after it you dare in the envelope', there was also the 'advertising percentage' they had to pay as well.
The amount was decided by the ITC, based on the winning bid, and the projected revenue from advertising in that region.
So, whilst Central and Scottish got away with winning bids of just £2,000 - the advertising percentage levied post winning, were far higher than one that won, say with a bid over of £20mil.
On that note, the revenue fees and/or franchise fees were changed over the years primarily to reduce them, in some cases to below what the outgoing company originally bid.
TV-AM for example bid I think it was about £15m for its breakfast licence, Sunrise (later GMTV) bid somewhere around £35m and won it. They later went cap in hand to the ITC and won a reduction in this figure, which IIRC ended up lower than the £15m-odd figure TV-AM had originally bid in the first place, which kind of defeated the entire point of the auction in the first place as far as the money was concerned. I believe this wasn't unique to GMTV, as some of the other high bidders had their fees reduced too.
TV-AM for example bid I think it was about £15m for its breakfast licence, Sunrise (later GMTV) bid somewhere around £35m and won it. They later went cap in hand to the ITC and won a reduction in this figure, which IIRC ended up lower than the £15m-odd figure TV-AM had originally bid in the first place, which kind of defeated the entire point of the auction in the first place as far as the money was concerned. I believe this wasn't unique to GMTV, as some of the other high bidders had their fees reduced too.
Not true - GMTV's fee was reduced to a figure that was still above TV-am's bid.
How would the 1980 franchise auction have ended if it included bidding? Would TVS and TSW have managed to oust Southern and Westward? Could any of the unsuccessful applicants have had a strong chance of defeating an incumbent company?
Nobody had mentioned anything about the competitors to STV and Tyne Tees yet.