BBC Chairman Moves to Main Commercial Competitor

Posted 28 November 2006 @ 11:27 am EET     Print     Reprint     E-Mail     Comments

LONDON (Reuters) - The chairman of the BBC, Michael Grade, has resigned to take the top job at ITV, the public service broadcaster's main commercial competitor, both companies announced.

ITV informed the London Stock Exchange Tuesday morning while the BBC were forced to make the announcement overnight after details of Grade's appointment as executive chairman appeared in a national newspaper.

Grade, 63, became the BBC's chairman in 2004, taking over from Gavyn Davies who resigned after the publication of a government-commissioned report that faulted the state-funded broadcaster on its coverage of the Iraq war.

"It's been a tough decision to leave the BBC but it was an opportunity I could not resist, given my family's history in the founding of ITV and my own background at (ITV subsidiary) London Weekend Television," he said.

"My first priority at ITV will be to support the team in accelerating the improvement in programming performance for our viewers and advertisers."

ITV has been struggling in recent months. It has been looking for a new chief executive since Charles Allen stepped down following a fall in advertising revenues and a slump in audience figures.

More recently, it was widely tipped to become a takeover target. Rupert Murdoch's BSkyB satellite outfit bought a 17.9 percent stake in ITV for 940 million pounds (1.4 billion euros, 1.8 billion dollars).

Grade's move will come as a major blow to the BBC, where he was negotiating the annual licence fee, the yearly charge payable by all television set owners in Britain that funds the broadcaster. The government-set charge currently stands at 131.50 pounds (194 euros, 255 dollars).

Grade, who had also been due to head the BBC Trust, which was to replace the current Board of Governors, was pushing for an above-inflation 2.3 percent rise.

Negotiations on that front have been tricky with opposition from finance minister Gordon Brown and Prime Minister Tony Blair.

As the BBC said it was "disappointed" with the news, current ITV chairman Sir Peter Burt said capturing Grade, who will succeed him, was "a real coup".

"Michael Grade's appointment will provide a strong and focused leadership at a critical time in ITV's history. The company will benefit enormously from his unrivalled broadcasting experience," he added.

Grade will take up his post in early 2007 and be paid an annual salary of 825,000 pounds. He is expected to remain in the role for up to three years. His package also includes a long-term share award scheme based on ITV's performance over the next five years.