26th Anniversary of the biggest shake up in ITV

They didn’t have a choice in the matter really. It was new legislation (the Broadcasting Act 1990) and the old legislation (the Broadcasting Act 1981) was being repealed. The ITV contracts had already been extended to allow for the transition but effectively what you’d have had to do to delay the franchise round would be to delay commencing the 1990 Act and the whole new regulatory regime that it involved. The ITC were only implementing the legislation they were faced with; they didn’t have the choice of going back to the 1981 Act and continuing to run that system beyond the end of the stipulated transition period ie 31/12/92.

Plus unusually, and for whatever reason, the 1981 Act and all of its predecessors had a sunset clause (s2(1)), which meant that the IBA would have had to cease operations at the end of 1996 anyway, unless new legislation was passed to continue it.

That's dead right, Thames were doing a lot of work with indies. Central were also using them a lot, and indeed the main reason why nobody bid against them was because more or less every Midlands indie was already working with Central and so weren't inclined to bite the hand that fed them by getting involved in rival bids. Mentorn were thinking of bidding against Central but then Central offered them a two-year contract and so they bid against LWT instead.

Bruce Gyngell said that TV-am was intending to become a publisher-broadcaster if they won the franchise, as you mentioned they'd already farmed out all their kids' output (albeit it was just the old TV-am kids' department setting up as an indie). So all the companies, winners and losers, were embracing it. And it's hardly a hard and fast rule because North West TV were going to be a publisher-broadcaster and lost to Granada.

I would recommend posters to this thread read Under The Hammer by Andrew Davidson and Independent Television in Britain, both of which go into the whole process in great detail with numerous interviews with those involved. As I've said before, the latter book says that Meridian were the only bidder who the ITC say they would have put through on exceptional circumstances regardless of the size of their bid compared to the others, because they were offering three sub-regions while the other bidders just the two. It wouldn't have mattered how much TVS bid. It also features David Mellor saying that if he was making the decisions, he'd have put Thames through on exceptional circumstances.

You can come up with theories on the deliberations but they all pretty much came down to some pretty simple questions. Did the bidders pass the quality threshold? Was the amount they bid realistic? That narrowed down the field, and then the next question was whether there was anything that demanded one bidder get the licence regardless of their bid. If there wasn't, it went on whoever was left who bid the most. That's it.

I think triggering "exceptional circumstances" for Thames would have been even more controversial than them being outbid. However (and this is just speculation which I know annoys some) had they got through the process bidding what they did, Thames would have been merged with/taken over by Carlton by 1993. I have little doubt in that.

Carlton had been trying to take over them since the early 80s, after all.

Would it have been realistically possible that TV-AM would have taken over / merged with Thames? Even so Carlton would almost certainly have wormed their way in and taken over both regardless of whether they were combined or separate companies.

I'm not sure TV-am would have got through under exceptional circumstances. It was far too profitable a franchise not to auction it off to the highest bidder, particularly considering the consortium behind GMTV, and their considerably lower running costs than TV-am. I know in hindsight, it wasn't sustainable paying what GMTV bid, but at the time they weren't considering competition from Channel 4.

Things probably would have been different. I can imagine that TVS would've already gone bust by then, as they'd already stretched themselves thin by buying MTM, and then there's LWT and Tyne Tees to consider, since Granada and Yorkshire had bought those two out by then (did Carlton own Central by then as well?). And would Thames have still been taken over by Pearson (the company now called Fremantle)? Different management would mean different bids.

Ownership of companies would have been different if the franchise round had been deferred. The financial positions of the companies would have been very different. YTV and TTT would not have needed to merge in 1992 to avoid bankruptcy for a start.

If the round had been deferred, and companies were allowed to buy no more than one other franchise (the regime still in place in 1994-5), Granada would probably not have even bid for the North East franchise, as they would doubtless have bought another franchise holder and therefore would have not have been able to bid for it.

The point is, the map would have been sufficiently different to ensure that the result would have been unrecognisable to what happened in 1991.

That's not why they merged. YTV and TT would have merged regardless – it was widely predicted since before the bids were even submitted in 1991. YTV bought 19% of TT at the start of 1991, and they set up a combined sales operation.

(Incidentally, that very same sales operation accidentally oversold about £15m of advertising in 1993 and had to give it back - which was more than the £11m savings they made from merging)

It’s arguable that the Yorkshire-Tyne Tees merger is what shaped the rest of the network through the 90s.

Interestingly, when the franchise winners were announced, Granada (part of the North East TV bid) tried to persuade Tyne Tees to surrender the licence and merge with NETV (which had bid £10m less). At the same time, Yorkshire’s board was being lobbied to merge with White Rose TV so that the combined company could pay White Rose’s bid of £17m (£20m less than Yorkshire bid).

It would have made a mockery of the whole system, but Yorkshire & TT stood firm. Not sure that was the best decision in hindsight.

Initially the industry expected that the rules would change in 1994 to allow one company to own three franchises. LWT was poised to swoop in and merge with YTTV to stave off Granada. It had already bought 14% of YTTV in anticipation. When it was announced that one company could only own two stations, YTTV was out of the question for LWT.

YTTV even considered demerging as a result of the decision only to allow a company to own two franchises.

Was the 1990 Act formulated with any knowledge of the goings on inside TVS with its purchase of MTM in order to potentially dismiss TVS at the next franchise round before it went bust?

Thames had the same troubles. There brought some us company but also overpaid..

That's also why they put in a bid a bit on the low side then got outbid by Carlton.

It's certainly plausible that the ITC wanted rid of both Thames and TVS but TSW and TV-AM were unfortunate victims. Some argue that the (unacceptably?) highly profitable TV-AM was being downright stingy with the size of their bid, so deserved to lose, but TSW was unlucky.