How one of the UK’s top news providers got Margaret Thatcher to tell its owners ‘you’re fired’

According to Ofcom data, Independent Television News (ITN), producer of ITV News, Channel Four News and Five News, is still the UK’s second biggest ‘news wholesaler’. That puts it behind the BBC but ahead of Sky,News Corp ,the Daily Mail Group and all other broadcast and print news providers. (http://stakeholders.ofcom.org.uk/binaries/research/media-literacy/media-ownership/morr_2015.pdf page 15).

Decisions made by ITV at the end of the 1990s mean the ITN brand is no longer so well known as it once was and ITV’s News at Ten trails the BBC competitor in audience. But the company remains a formidable force in UK news. In an article for a newsletter distributed to former ITN staff, I have used official documents just released to the National Archives to fill in an important missing part of the company’s history. At the time of these documents I was Deputy Editor of ITN.

It has been one of the best secrets in commercial television, just how did the management of ITN persuade Margaret Thatcher’s Government to fire ITN’s owners, passing a law that said ITV couldn’t own a majority of shares in its own news supplier. Some of the secrets are now out, revealed in 1987 and 1988 Cabinet files released into the National Archives. .
The owners of ITV and ITN realised very late in the day what was going on, shocked by yet another blow from the Government that in the subsequent Broadcasting Act of 1990 also made them bid for their licences in an auction and stopped them selling the advertising on Channel Four. To the then Prime Minister,Margaret Thatcher, quoted in the files, ITV was ‘a commercial cartel..exploiting their monopoly position on commercial television’ and ‘restrictive practices and over-manning were widespread in both BBC and ITV productions’.
But it is also clear from the documents that if ITV were regarded as the bad guys, ITN were the good guys. ‘It is important that our reforms [to ITV] should do nothing to put at risk ITN’s achievement as a source of a high quality news service of integrity’.
As a result, in the autumn of 1987 a special paper called ‘Constitution of ITN’ was drafted for a Cabinet Committee, chaired by Margaret Thatcher herself. It frequently quoted the views of ITN management who had been lobbying the Government, and very successfully too.No manager is mentioned in the files but behind the scenes the Editor of ITN,David (later Sir David) Nicholas and the presenter of News at Ten,Sir Alastair Burnet,who was also a director of ITN, had been talking to government officials and advisers.  I will never forget the board meeting when Alastair announced his resignation as a director, walked out of the room and went down to the newsroom to prepare to read the news on the network he had just broken with. It was an interesting day to be supervising News at Ten.
After explaining ITN’s diversification into Channel Four News and Superchannel News the 1987 paper went on ‘ITN management believe that the mutual company structure [each ITN franchise holder had a share in ITN depending on how big it was in the advertising market] is no longer sensible given the diversification outlined above.First there is insufficient risk capital for successful expansion.Second,expansion is also being inhibited by growing conflicts of interests between its shareholders’. There had been a lot of tension between those  ITN shareholders who were investors in the new pan-European Superchannel and those who weren’t.
The Home Secretary, Douglas Hurd, who was responsible for broadcasting, signed off a paper arguing for a new system that would widen the shareholding beyond the ITV companies thus diluting their control. He also wanted to create a news contract with a profit margin, a revolutionary and to some people heretical idea.
But then his officials began asking if there was to be a contract why shouldn’t other bidders be allowed. ‘It is hard to see why their [ITN’s] exposure to the competitive pressures of the market should not at least be contemplated’. Margaret Thatcher herself spelt out the compromise at a Cabinet committee in February 1988; ITN would have a monopoly for a transitional period while it became ‘more cost conscious and effective’ before the next contract period starting in 2003.At that point others could bid for the ITV contract.
By October 1988 Douglas Hurd had decided to do a bit more ‘buttressing’ to make sure ITV was required to show high quality news in peak periods. This would help to ‘ensure that the BBC did not emerge with a virtual monopoly’. Thanks to the release of these files we now know that it was at that meeting Margaret Thatcher delivered the coup de grace for ITV in her summing up. ‘Although the body or bodies providing Channel 3 News serves [it was decided to use this form of words rather than give away it was meant to be ITN] might start with a minority of external shareholders the objective should be to build up outside shareholding into a majority’.
By the time this became legislation it had been hardened up further and a majority of non-ITV shareholders was demanded for what were now called ‘nominated news providers’, another proxy for ITN.
Nowhere in the documents is there any sign that the Government ever asked ITV’s views during ITN management’s secret’s one year campaign. It would take over fifteen years for ITV to persuade a Government to remove the restrictions on its ITN shareholding but even to this day ITV only owns 40% of ITN,it has never got back to majority ownership.

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