EVEN before Charles Allen can be given the order of the boot, the knives are out for the man that might be his successor. We all know that broadcasters are fickle types, willing to call for the head of any executive at the drop of a hat. The febrile atmospshere in TV land makes it all the more remarkable that Mr Allen has lasted as long as he has. Yet even before Stephen Carter has had a chance to apply for the job, let alone take up the position, the snipers are taking aim.
The Don’t Get Carter campaign has some forceful arguments on its side. The most ticklish issue is that Mr Carter has only just stopped being the Ofcom regulator. There is nothing wrong with gamekeepers turning to poaching, per se. But Mr Carter is likely to be in possession of commercially sensitive information about ITV’s rivals. Just as importantly he has a familiarity with regulatory thinking that could put peers at a distinct disadvantage.
Mr Carter will, doubtless, behave honourably. But rivals have every right to enjoy all assurance that confidential infomation given to a regulator could not be used against them. Mr Carter may not misuse the information consciously. But neither can he wipe his memory clean. Well constructed civil service rules command that Mr Carter cannot take a private sector role for six months. There is provision that the six months turns into 12, and if Mr Carter is appointed to lead ITV it must surely be appropriate that he serves the longer period of gardening leave.
That being so, it would be astonishing if the broadcaster saw fit to appoint the former Ofcom man. ITV is in deep trouble: the general state of the advertising market is doing the company no favours, but ITV is performing poorly in relative as well as absolute terms. The broadcaster’s creative juices are not working terribly well either, if lacklustre ratings are any guide. ITV cannot afford to wait a year to fill the chief executive’s chair. It cannot really afford to wait three months, although it may have to.
If not Mr Carter, who? It is a question that the ITV board must answer before giving Charles Allen his marching orders. Mr Allen’s star may be in the descendent, but he is better than nothing. Andy Duncan, the Channel 4 chief executive, is a strong candidate. So is Tony Ball, formerly of BSkyB. Ditto John Smith of BBC Worldwide and Roger Parry, the chairman of Johnson Press.
ITV shareholders are fortunate to have the likes of James Crosby, formerly of HBOS, and Mike Clasper, of BAA fame, sitting as non-executives. The fact that the ITV chief exec role brings lashings of glamour also helps: it may help to attract management talent that would otherwise be heading for larger companies operating in less straitened circumstances.
Governor’s stitch in time
MERVYN KING has had his revenge. Last summer the Bank of England Governor was outvoted by colleagues on the Monetary Policy Committee over a rate cut he never wanted and did not think was justified.
This summer he has ambushed not just London’s financial markets, but also his own MPC, in what many blithely assumed would be an August interlude before the arrival of two new independent members of the committee.
The Governor’s ambush seems justified if the official GDP estimates are right. Anyone adopting the Bernanke posture — that future changes in rates would depend on how economic reality compared with forecasts — would have to think about a rate change after the latest fusillade of statistics.
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UK output rose pretty fast in the second quarter and statistical revisions suggested that spare capacity might have been stretched tighter than the Bank realised before that. Consumer spending recovered sharply after the post-Christmas slowdown and mortgage approvals are surging to new peaks.
These two factors are also interacting. The piles of spending money that people extract from the value of their homes when they move or remortgage have been growing back up towards the heights of 2004.
There are absolutely no signs of external oil price shocks infecting the jobs market, the classic warning sign for inflation, but the sudden spring surge in consumer prices does suggest that many businesses are smuggling in price rises, previously ruled out by competition, under the cover of high oil prices. There is also evidence of a bubble of risk building up in the financial system as bank lending to other financial institutions spirals.
Given that the MPC unanimously backed no change in July, the easy response was for members to sound more hawkish, without yet acting. A higher pound is just what industry does not need. But new Inflation Report projections, which MPC members will have seen, seem to have left no reason for delay. Investors ought to be cheered when they realise an uncertainty has been removed.
Cleaning up
INVESTORS are only just beginning to realise how much Barclays has changed over the past few years. The tidying up of its UK retail business, sometimes painful for its reputation, is well known, and continues with the closure of overlapping branches of the Woolwich mortgages subsidiary.
Barclays’ overseas strategy has been less appreciated because it has not come in huge lumps. At last, however, John Varley has been able to report that more than half group profits come from abroad. With the measured acquisitions policy the bank seems to have in mind, this will be concreted.
Some foreign earnings are group activities, such as Barclays Global Investors and other elements of Barclays Capital, but there are many free-standing retail and corporate businesses round Europe, the Middle East and Africa.
Traders long saw Barclays as a cleaned-up operation waiting to be taken over by the likes of Citigroup. Ironically, it could now be more attractive because it does not rely on mature UK markets. But who wants a bid when Barclays can offer its own compelling story of growth?
TRINITY MIRROR is at pains to emphasise that it is embarking on a business review as opposed to a strategic review. This is surely no more than semantics. Yes, the term “strategic review” has come to be associated with expectations of a large scale disposal of assets whereas “business review” can be interpreted as meaning the company simply wants to demonstrate renewed determination to make the most of the business in its current form. Investors will expect the company to be amenable to anyone who offers a sensible sum for all or part of the group, however.
