Carlton Communications

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Carlton Communications plc
Industry Television
Fate Merged with Granada plc
Successor(s) ITV plc
Founded 1939
Defunct 2004
Headquarters London,
United Kingdom
Key people Michael Green (Chairman)
Products Carlton Cinema
Carlton Select
Carlton World
Carlton Kids
Carlton Food Network
Subsidiaries Carlton Television
ITV Digital (50%)
GMTV (20%)
Carlton Screen Advertising
ITN (18%)

Carlton Communications was a British media company. It was led by Michael Green and listed on the London Stock Exchange from 1983 until February 2, 2004, when it was bought by Granada plc in a corporate takeover to form ITV plc. Carlton shareholders gained approximately 32% of ITV plc.[1]

As well as being the parent company of Carlton Television Limited it was also involved in several other media and broadcasting businesses and was a constituent of the FTSE 100 Index.

History[edit]

Early years[edit]

In 1967 Michael Green established a printing and photo-processing company, Tangent Industries, with his brother-in-law and his father-in-law, Lord Wolfson. In 1982, Michael Green bought Transvideo, renaming the company Carlton Television Studios. A year later the name was changed to Carlton Communications when the company went public. Soon after, the Moving Picture Company (MPC), Europe's largest video facilities provider, joined Carlton in a joint venture to acquire the U.K. subsidiary of California's International Video Corporation for £400,000. Carlton acquired MPC itself in July 1983 for £13 million, with Mike Luckwell as managing director of the enlarged company. During 1985, Abekas Video Systems was purchased for £30m, helping to expand the company's operations in the field of video editing and allowing Carlton to produce projects as diverse as commercials, rock music videos, and corporate videos. (Scitex Corporation was sold ten years later for $52 million). Green valued strict financial controls to allow cash flow, so when new companies were acquired the existing managers were retrained to Carlton strict accounting practices, resulting in higher profits. Carlton's gross profit reached £38.1 million in 1985.

Michael Green tried unsuccessfully to acquire a broadcasting station. He first tried for Thames (see below) before trying for LWT. The Independent Broadcasting Authority (IBA) intervened, allowing Green only a 10 percent share. In response, Green sold his existing 5 percent share for £1 million. Carlton also failed to win the direct satellite broadcasting franchise, which went to British Satellite Broadcasting (BSB). In March 1987, Carlton acquired a 20 per cent in Central Television from Ladbrokes for £30million[2] which finally gave Carlton its first stake in a terrestrial broadcasting company[3] Bob Phillis became Carlton's representative on the broad of directors, having previously worked for Central before joining Carlton as managing director. Carlton increased its portfolio of media companies with the acquisition of Zenith Productions for £7.3 million.[4]

Carlton purchased Skyscan, the satellite dish manufacturer, in 1986. The company was sold on in 1988 because of slow sales and continuing delays in new start-up television services. Carlton's biggest acquisition of the decade came in October 1988, when it bought Technicolor for $780m, which led to Carlton becoming the world's largest producer of videocassette duplication and motion picture film processing, serving Hollywood studios and software companies. A year later, Carlton bought United Engineering Industries (UEI) plc for £580m, incorporating Quantel and Solid State Logic, which designed and manufactured professional video and sound products. Carlton later disposed of Solid State Logic in 1999 and Quantel in 2000.[5]

Thames[edit]

Carlton's most significant move was to outbid Thames Television for the ITV London weekday licence in 1991.[6] Previously, in 1985, Carlton had executed a failed take-over bid for Thames after Thorn EMI and British Electric Traction decided to sell its share of Thames. The deal was blocked by both Richard Dunn, Chief Executive of Thames, and by the IBA, who concluded 'the proposal would lead to a major change in the nature and characteristic of a viable ITV programme company'. Michael Green was left 'bewildered', saying: 'We are surprised at the IBA's decision. I'm absolutely certain it would not have been a major change to Thames. We have always suggested that we would make absolutely sure the company would continue to be what it is at this moment in time.' IBA stated they had nothing against Carlton owning part of an ITV company, but believed 'any' single ownership of an ITV company was undesirable.[7]

Thames finally floated on the stock market in July 1986, A few days afterwards speculation appeared that Carlton had attempted to buy a sizable amount of shares, Michael Green chairman of Carlton was quoted saying "I cant possibly comment" but a Thames spokesperson pointed out "It does seem quite likely, however, no one share holder can own more than 10% of our equity so its difficult to see what they might have in mind"[8]

It has been said that Green talked to the then Prime Minister Margaret Thatcher on the matter, which in turn may have helped to shape the 1990 Parliamentary Act which replaced the IBA with the Independent Television Commission and the change in franchise allocation procedures. Carlton Television had a policy of being a 'publisher-broadcaster', not producing any programmes of its own; even its news was outsourced to London News Network.[9] By 1994, the ITC had criticised the channel for its 'poor network programming', and said further improvements could be made.[10]

1990s[edit]

In January 1992, Carlton strengthened its media library when it acquired Pickwick Group, which in turn was re-branded and merged with the existing Carlton library to create Carlton Visual Entertainment. The company acquired a 20% stake in GMTV a month after it won the ITV breakfast franchise 1991 and bought 18% stake in Independent Television News in 1993.[6] Carlton increased its stake in Central Television to 81% in 1994[6] and two years later added Westcountry Television to its portfolio.[6] The acquisition of Central made Carlton one of the largest television producers in the UK, when Action Time and Planet 24 were added to Green's empire.[11]

Future Prime Minister David Cameron became Director of Corporate Affairs for Carlton from July 1994 to February 2001, his only venture into employment outside of the political world.[12][13] Within six months the Company expressed their concerns that the government 'must allow ITV firms the commercial freedom already granted to the BBC to expand their businesses abroad' and that the restrictions of the Broadcasting Act 1990 should be replaced by normal competition policy, allowing further consolidation among ITV companies.

Carlton expanded its non-TV interests by acquiring the cinema advertising company Cinema Media (formerly Rank Screen Advertising), the UK’s biggest cinema sales house at the time, from Schroder ventures,[14][15] renaming it Carlton Screen Advertising. In 1997, along with Granada plc and British Sky Broadcasting, Carlton bid successfully for the UK national digital terrestrial television licence. Sky was excluded from the eventual company, ONdigital, for competition reasons, and this marked the start of Granada and Carlton working more closely together.[16]

In early January 1999, the company bought the ITC television and film library from PolyGram/Seagram for £91 million, which reunited the programme library of Associated Television and Central Television and doubled the stock of its library division Carlton International, by giving it a total of 15,000 hours of programming. Carlton chairman Michael Green said: 'The ITC library is a jewel in the crown. We can now unite it with the other gems from Britain's film and television heritage in our excellent library.'[17] From September 1999, Central Broadcasting and Westcountry Television were re-branded as Carlton.[18] This later paved the way for the eventual downgrading of all of ITV's regional identities, though the names were never fully dropped as their news programmes Central News and Westcountry Live continued, and eventually returned to the air (albeit as ITV1 Central and ITV1 Westcountry) in 2004. In 2000, United Business & Media proposed a merger with Carlton.[19] However, the parties were outmanoeuvred by Granada, who took over only the television interests of UNM (the rest of the company remains in existence). The broadcasting arm of HTV (though not the majority of its production operations) were sold to Carlton[6] for competition reasons, becoming the company's final major acquisition.

In 1999, Technicolor continued expansion with the acquisitions of wholly owned businesses in Canada and Australia and started the development of digital cinema within two years. In 2001, Technicolor was sold to Thomson multimedia for $1.9bn and[20] in 2002 ITV Digital (the renamed ONdigital) collapsed.[21]

In late 2003, Carlton and Granada finally agreed to merge. While described as a merger, it was essentially a take-over by Granada as its shareholders would own two-thirds of the new company, Charles Allen would become Chief Executive, and Michael Green would depart the company he had built.[22] After the merger, the Granada brand would remain as the name of the Granada Television and of the Granada Productions brand. In contrast, the Carlton franchises dropped the Carlton name for local programming from the day of the merger (2 February 2004) with the Carlton network production brand disappearing from 1 November 2004; even the London weekday franchise started trading as ITV1 London (Weekdays), and was operationally (though not legally) merged with London Weekend Television as ITV London. The Carlton brand, which is now only used by Carlton Screen Advertising (and then only in the Republic of Ireland and Northern Ireland), is owned by Dermot Hanrahan.[23]

References[edit]

  1. ^ Merger of Granada and Carlton
  2. ^ Ladbroke sale fuels takeover speculation.Cliff Feltham. The Times, Monday, 16 March 1987; pg. 19
  3. ^ .Carlton buys Central stake from LadbrokeStoddart, RobinThe Guardian (1959-2003); 16 March 1987;
  4. ^ "Carlton Communications PLC History". FundingUniverse. Retrieved 2013-06-22. 
  5. ^ Guardian Thursday, May 25, 1989 Page: 13 Lisa Buckingham Carlton Mounts £510 UEI bid
  6. ^ a b c d e ITV plc: History
  7. ^ Guardian Friday, Oct 11 1985 P20, Dennis Barker " Carlton Communications proposal ruled unaccepted"- IBA blocks sale of Thames
  8. ^ Carlton chases Thames shares to 40p premium. Michael Clark. The Times, Thursday, July 03, 1986
  9. ^ London's News
  10. ^ Carter, Meg (1995-04-14). "ITV gets a mixed review from ITC". Marketing Week. Retrieved 2013-06-22. 
  11. ^ Carlton Communications: History
  12. ^ The David Cameron story
  13. ^ James Robinson and David Teather (2010-02-20). "Cameron – the PR years". The Guardian. Retrieved 2013-06-22. 
  14. ^ Izatt, Janet (1996-06-07). "NEWS: Carlton Communications bids for Cinema Media". PRWeek. Retrieved 2013-06-22. 
  15. ^ "Key Carlton player to head Cinema Media marketing". Marketing Week. 1996-11-01. Retrieved 2013-06-22. 
  16. ^ Ten into three
  17. ^ "Thunderbirds are going, going, gone". BBC News. 1999-01-19. Retrieved 2013-06-22. 
  18. ^ BFI: Carlton Westcountry
  19. ^ Carlton to sue UBM over failed ITV merger
  20. ^ Carlton sells Technicolor
  21. ^ On-Digital collapse a 'blow for Labour'
  22. ^ ITV shares on London stock market
  23. ^ Hanrahan acquires Carlton Screen Advertising from ITV