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Channel 5 licence application (December 2012)

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WH
Whataday Founding member
This brings me to an interesting point I often ponder.

By the 90s, cash-rich Granada had invested into several 'non-core' businesses such as motorway service stations and theme parks. These were all sold (in the case of the theme parks, at far below their face value) in the late 90s and early 00s to free up cash, allowing Granada to compete effectively in the 'smash and grab' days of purchasing other franchisees and ultimately become the behemoth that is ITV plc.

Would Granada be a better business today if they had actually sold their television interests for a healthy price, and maintained their other interests?


No, is the short answer. And Yes is the long answer.

The long answer is far more interesting. Basically Granada Compass, which was the group that held all the service stations/hotels/Granada Media Group wanted to sell their TV interests at the start of the 21st century.

However, by selling it they would've been faced with £1.5 billion capital gains tax bill, so they drew up a complicated demerger process which saved them the huge bill.

So in effect, it wouldn't have been a good idea to have sold their TV interests due to the huge tax bill, but they did divest their TV interests via another route. The Granada that owned the service stations etc still does exist, albeit without any Granada branding, and it was the TV division which was spun off (in effect, 'sold').
NW
nwtv2003
So in effect, it wouldn't have been a good idea to have sold their TV interests due to the huge tax bill, but they did divest their TV interests via another route. The Granada that owned the service stations etc still does exist, albeit without any Granada branding, and it was the TV division which was spun off (in effect, 'sold').


I didn't know that, I always thought it was the other way round and that Granada sold everything else off and kept GMG, or by that time GR/N/D/ (to be annoying), I'm right in thinking Granada's motorway services are Moto now aren't they? Hands up who remembers G-Wizz...! www.g-wizz.net , which used to get promoted on the idents at the time.

I remember back in 2000 or so when there was going to be a merger between Carlton and UNM, which got called off, leading Granada to come in and buy Meridian, Anglia and HTV, which I think they surely paid over the odds for. Granted ITV plc still would have happened anyway, but Carlton/UNM if it did happen would have been stronger than Granada. Plus UNM had quite a share in Channel 5 at the time, and apparently Granada at that time didn't want anything to do with C5, The Wright Stuff being a good example, the first series was made at Anglia in 2000, when it ended in 2001 Granada didn't want to do anymore, and Princess Productions bought the show from them.
Last edited by nwtv2003 on 3 January 2013 11:56pm
WH
Whataday Founding member
So in effect, it wouldn't have been a good idea to have sold their TV interests due to the huge tax bill, but they did divest their TV interests via another route. The Granada that owned the service stations etc still does exist, albeit without any Granada branding, and it was the TV division which was spun off (in effect, 'sold').


I didn't know that, I always thought it was the other way round and that Granada sold everything else off and kept GMG, or by that time GR/N/D/ (to be annoying), I'm right in thinking Granada's motorway services are Moto now aren't they? Hands up who remembers G-Wizz...! www.g-wizz.net , which used to get promoted on the idents at the time.


GR/N/D/ kept the brand as it was so closely associated with telly, and Granada Media became Granada Ltd, owned by Granada Plc. Granada Compass Plc became Compass Plc and rebranded Granada Service Stations as Moto.

Also, Granada Plc took over Carlton, and was renamed ITV Plc. It was treated as a takeover for accounting purposes, not a merger. As you say, if Carlton has been successful in taking over UNM, it couldve been the other way around.

These things arent usually reported at the time as they dont become clear until annual accounts etc, by which time it's not really considered newsworthy.
GE
thegeek Founding member
So in effect, it wouldn't have been a good idea to have sold their TV interests due to the huge tax bill, but they did divest their TV interests via another route. The Granada that owned the service stations etc still does exist, albeit without any Granada branding, and it was the TV division which was spun off (in effect, 'sold').


I didn't know that, I always thought it was the other way round and that Granada sold everything else off and kept GMG, or by that time GR/N/D/ (to be annoying), I'm right in thinking Granada's motorway services are Moto now aren't they? Hands up who remembers G-Wizz...! www.g-wizz.net , which used to get promoted on the idents at the time.

Granada service stations are now Moto, yes - but no longer owned by Compass Group. They were sold off in 2006 to Macquarie Bank (bringing things back around to TV-related matters, also owners of Red Bee and Arqiva).
What's left of Compass is mostly involved in workplace hospitality and catering - you may know under their Eurest or Scholarest brands.
RD
rdd Founding member
It was a rather complex series of transactions. As I recall the sequence of events essentially occurred as follows:

1. In July 2000, Granada Group plc and Compass Group plc merged to form Granada Compass plc.
At the same time, Granada Media plc (consisting of the media businesses previously held by Granada Group plc) was admitted to the official list of the London Stock Exchange with 20% of the shares offered to the market and the remainder held by Granada Compass plc.
2. In February 2001, Compass Group plc was spun off from Granada Compass plc. At this stage Granada Compass plc owned 80% of Granada Media plc and nothing else. Then essentially a share swop occurred whereby Granada Media plc's shares were exchanged for Granada Compass plc shares, so that Granada Compass plc now owned 100% of Granada Media plc. Granada Compass plc was renamed Granada plc and the listing of Granada Media plc was cancelled.

Very weird way to do it. What effectively happened is that Granada's hospitality business was sold to Compass but it was done in a very roundabout way involving at least four companies. It seems to have been all pre-planed and done for tax purposes and must have taken an army of lawyers to devise. It probably essentially paved the way for ITV plc because a combined media and hospitality conglumerate was a very odd beast in the late 1990s and the logic of the merger might have been harder to sell to Michael Green.
FN
FromtheNorth
Seems that TV-am were to bid as "The Entertainment Channel" and Scottish TV were to bid as "Channel S" but both pulled out...

http://www.independent.co.uk/news/business/tvam-backs-out-of-channel-5-bid-1530521.html
IS
Inspector Sands
Seems that TV-am were to bid as "The Entertainment Channel" and Scottish TV were to bid as "Channel S" but both pulled out...

In the post-franchise announcement period I seem to remember TVam being involved bids for everything going, I suppose they had the money in the bank to invest. They did win one, TVam was part of the consortium that won the INR2 license - what became Virgin 1215 (now Absolute Radio). Even though it wasn't due to launch until after TVam went off air I do remember them having some sort of competition during the weather that gave away radios as prizes mentioning the new station
NW
nwtv2003
Seems that TV-am were to bid as "The Entertainment Channel" and Scottish TV were to bid as "Channel S" but both pulled out...

In the post-franchise announcement period I seem to remember TVam being involved bids for everything going, I suppose they had the money in the bank to invest. They did win one, TVam was part of the consortium that won the INR2 license - what became Virgin 1215 (now Absolute Radio). Even though it wasn't due to launch until after TVam went off air I do remember them having some sort of competition during the weather that gave away radios as prizes mentioning the new station


Although I can't remember where I read it, TV-am were in a consortium for the national teletext franchise in 1992, but obviously lost out to Teletext Ltd. There's a clip on TV Ark showing that if CPV-TV won the London licence, then TV-am would have provided its news service.
IS
Inspector Sands
Although I can't remember where I read it, TV-am were in a consortium for the national teletext franchise in 1992, but obviously lost out to Teletext Ltd.

Yes they went for the teletext license too, it seemed like they were just going for anything. I wonder whether the investors would have made more money that way or via the eventual route - in the end it was used as a shell company for a casino chain.
Quote:
There's a clip on TV Ark showing that if CPV-TV won the London licence, then TV-am would have provided its news service.

Presumably because of the David Frost connection. It might not have happened though, I can't see it being very cost effective if CPV won and TVam lost.

Incidently according to Wikipedia TVam sold it's share of Virgin Radio, it went to several buyers including David Frost, I assume that was some sort of share swap, Frost being one of the owners of TVam

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