When Granada chairman Charles Allen penned a letter to Prime Minister Tony Blair a few weeks ago, he hoped to spur consideration of the communications bill and clear the way for the long-planned merger of ITV license holders Carlton and Granada. Instead, he has raised concerns among shareholders of ONdigital – Granada and Carlton’s jointly held pay channel – about the future of their investment.
In the letter, which was leaked to the press, Allen reportedly warned that if Granada and Carlton remain independent much longer, ONdigital shareholders may lose patience with the (so far) loss-making venture, forcing Carlton and Granada to close down the channel. The demise of ONdigital could significantly affect the government’s plan to switch from analog to digital between 2006 and 2010.
According to a Financial Times poll, four of ONdigital’s 20 shareholders are in favor of pulling up their stakes. A Granada spokesperson says the company declined to issue a comment in reaction to the poll, though she notes that the figure represents less than 20% shareholders.
The communications bill was not listed in the newly elected government’s legislative program, although some sources say a decision will be made by first quarter 2002.
ONdigital will be renamed ITV Digital from July 11 as part of ITV’s rebranding efforts. Later this year, ITV will become ITV1 and internet service ONnet will be ITV Active. The ITV Sport Channel is scheduled to launch on August 11.