Yes, TV-am bid something like £16m, GMTV came along with about £33m I think it was, won the franchise and then later went to reduce this figure to a level below what TV-am bid in the first place.
Assuming all played out the same way it did, TV-am was very profitable in 1991 and very popular at the time. Its probably safe to say The Big Breakfast gained viewers because everybody turned off GMTV in the early days of 1993, when they tried to go off in a different direction and were ultimately forced to copy the TV-am model that worked well for the former company. If GMTV hadn't happened, and TV-am was still on the air, its could have put up a serious ratings fight against the Breakfast in 1993.
I wouldn't agree with that, probably, The Big Breakfast's ratings were going up during TV-am's last few months in 1992, because every kid in Britain was watching it, and bringing their parents along too, so even if TV-am had carried on into 1993 it would have seen ratings fall quite substantially. GMTV was in pretty poor shape editorially at the start, but the main problem for them was that thousands of parents and kids who they were expecting to tune in weren't there, because they'd all gone off to The Big Breakfast. And boring old TV-am would have probably have been just as badly hit (not least as they'd then be doing all the high-faluting franchise-winning stuff they'd promised the ITC).
I don't really buy the idea, as often mentioned on this forum, that TV-am should have won, seemingly because they were popular and profitable. Bruce Gyngell would always over-exaggerate how successful TV-am was, and of course for most of the time they had a captive audience because Breakfast News and The Channel Four Daily were so boring. If you wanted something a bit lighter in the mornings, it was TV-am or nothing. The thing that had most effect on TV-am's ratings wasn't anything they did, it was Breakfast Time getting rid of the red sofas.
As for its profitability, that had no value for the audience, the ITC or the treasury. In Morning Glory they mention William Phillips reviewing TV-am in 1991 and saying it was likely to lose because it was "populist without being especially popular" and that it made more money than was "diplomatic". Certainly there was no sign of those massive profits being invested on air, even at the age of eleven I could tell its programmes had a very low budget. If the criteria for a successful franchise was that it made loads of money for its shareholders then yes, it was a success, but you would hope for higher standards than that.
Not entirely sure what TSW did cut back wise, if anything, since they didn't do that much outside of their area anyway. Anyway after a reverse takeover into some other direction the entire operation has since I believe fell into administration.
Harry Turner talks about the TSW bid in Independent Television in Britain, which was massive, saying that it was based on the idea that they would then contract absolutely everything out and sell all the assets like the studios, and you'd be left with a newsroom and a Director of Programmes and that would be enough to keep the station going. Although it sounds so little like what TSW was you wonder what the point of it all was if that was all you were left with.