The 1990 Broadcasting Act brought in this ridiculous idea that you had to bid away a proportion of your profits on a ten-year horizon. Ridiculous. At the same time, Channel 4, which had up to then, been funded by the ITV system, in return for the ITV system selling the air time, that came to an end. Satellite was coming along. They were on a subscription, but advertising was creeping in at a rate of knots. The delusion on the part of politicians, who thought that advertising revenue would grow in proportion to the number of channels available for its distribution, was the absolute opposite of what happens. When the channels of delivery grow, the cost of advertising falls. And at best, you might say the overall gross will go up, but it’s now being shared by five. So, no, that was ridiculous. However, nobody actually believed that if you got a franchise, and they didn’t put you out of business on the first day, then you’re in there, and you were a part of it. And eventually the rules would be relaxed. That you could own more than one franchise.
So the conclusion Granada came to was that if we had to bid so much money that it wasn’t a business, we wouldn’t do it. So we set about working up what we would pay. At the same time, you were allowed to own another company, provided it wasn’t contiguous with your own area. So we decided we’d bid for Tyne Tees. We made it quite public that we were going to bid for Tyne Tees. Clive Leach at Yorkshire Television was furious, because it was his ambition that, although he couldn’t bid directly, he could have held a proportion of shares in Tyne Tees. And he believed, quite rightly, that the day would come when they could own the lot. So I actually rang him up to tell him. And he was livid.
Then we got a tip off that Phil Redmond was going to bid for Granada, supported by Yorkshire Television. So that was, for them, the view held throughout Granada that if it’s going to put us out of business, what’s the point? So we’ll give it our best shot up to a given level of investment. And that’s what happened.
Nobody bid for Central. Central got it for £2,000. Nobody bid for Scottish. But I did ask John Fairley when the dust settled, “Why was it such as lousy bid from Phil Redmond?” And he said, “Clive Leach was furious. It was late in the day. We were up to our necks in doing our own franchise application. We tried to influence Phil Redmond, but you know Phil Redmond. He wouldn’t listen to anybody.” But Phil Redmond put in a programming bid, which was ludicrous. Alan Bennett was going to write a play for him every month. Things like that. And I think he bid £37 million on top.
And Granada’s bid?
Seven. Clive Leach bid 35 for Yorkshire. We bid five for Tyne Tees. Tyne Tees had never made more than £3.5 million, ever, in monopoly circumstances, which we all were. They bid £15 million. We could bid five, because we could have run a massive chunk of… and given the way technology was developing, we could have run almost all their overhead off Granada for a small marginal cost. But we didn’t get it.
And I did a lot of reading after the event. It was decided by the IBA that they were going to lose certain people. They were sure they were going to lose because they knew the bids of course. They knew they were going to lose. I think they knew they were going to lose Southern. They were very preoccupied with the programming side of the network being so damaged that there wouldn’t be a competitive offering. However, that’s not what the Act said, it didn’t say not to bid your profits away. I remember Clive Leach and he was speaking to me again, realising what they’d done. He said to me, “I get up every Monday morning and knowing I’ve got to make a million quid a week.” That’s what they bid. And there was an ensuing scandal, which you may know about or not know about, they cooked the books in one set of annual accounts and got found out. Leach had to go, his finance director had to go. Ian Ritchie had already gone because he thought he had been double crossed on the Yorkshire-Tyne Tees thing.
The Phil Redmond bid, was that the initiative of Phil Redmond or did it come from Clive Leach?
I honestly don’t know the answer to that. I think Phil was going to bid anyway, because he approached me very early on and said ‘Would I go and be his managing director?’ I had no intention of ever going to be his managing director but he’s known to be notoriously mean, Phil Redmond, and so, to amuse myself more than anything, I said to him, “Look, I have no desire to leave Granada but if you will give me 5% of the equity, I’ll come.” And I never heard another word.
So, the Granada bid was seven million, what was the Yorkshire bid?
It was 35, I think. And Tyne Tees, yes. 50 million a year and they gave him the franchise. I mean, other franchises in the area, people lost by putting in business plans like that, but Yorkshire, because there were all sorts of talk of conspiracy that George Russell was on the board of BlackRock insurance company in Newcastle and the local gentry who was a duke of whatever was on the board of Tyne Tees, and I’m not sure that all of that’s true actually, but I think the IBA just thought they had to hold onto some shreds of a network schedule. Without having to go back and start from scratch all over again.