Irish media chiefs set to fight battle for ITV

Although he may be well-known in Ireland, Gerry Murphy, the new head of Carlton Communications, appears to have risen almost without trace in Britain. After five successful if unspectacular years in charge of the less than glamorous National Freight Company, he has suddenly appeared centre stage in the battle for control of Independent Television.

There is considerable confusion in the British media about the 45-year-old Irishman with a penchant for BMW motorcycles. Both Co Kilkenny and Co Cork were credited with being his birthplace this week - Kilkenny is the correct county - and one paper conferred him with the honour of having invented Baileys Irish Cream.His adversary in the coming tussle is by contrast a very well-known figure. The Donegal-born chairman of Granada PLC, Mr Gerry Robinson, was a prominent supporter of Tony Blair before the last election, and he has been rewarded with the chairmanship of the Arts Council of England. He is also one of the most highly paid businessmen in Britain, set to earn £10 million from the group over the next three years.

In the coming three weeks, Mr Robinson and Mr Murphy will help decide the fate of United News and Media, which has been put up for sale. It will be the opening skirmish in a prolonged battle for control of the ITV network, in which Carlton and Granada are now the dominant players.

Mr Murphy's appointment this week to Carlton, which owns London-based Carlton TV, followed the decision by Lord Hollick, the chief executive of United News and Media, and Michael Green, the chairman of Carlton, to call off a planned sterling £8 billion (€12.88 billion) merger. The merger fell through last Friday after Mr Green decided the price demanded by the UK regulatory authorities - the sale of United's prize Meridian TV subsidiary - was too high.

It had always been a unlikely marriage. Lord Hollick was something of a Labour "luvvie", while Mr Green was seen as a dyed in the wool Tory. It was clear that Mr Green had had his doubts about the merger for several weeks - if not longer - and had been lining up Mr Murphy just in case. The Irishman is the fourth chief executive at Carlton in 10 years and how long he stays in his new job will depend on how well he handles the fallout from the failed merger. The initial skirmish may be for the TV interests of United, but the ultimate prize will be control of the ITV network.

The ground rules for the coming contest were set by Trade Secretary Stephen Byers in his ruling on whether the proposed Carlton and United merger could go ahead. In essence, Mr Byers has told Granada and Carlton that if they cannot agree on how to split up United News and Media, then Granada will be allowed make a hostile bid for the whole of United or Carlton.

Mr Robinson has made it clear that he wants Meridian and Anglia, the two flagship ITV franchises in the United stable. Carlton is looking at getting HTV, the least attractive of the three United TV companies, as a consolation prize. Lord Hollick is asking at least £2 billion sterling for the three franchises and will sell the Express group of papers separately.

Any deal that is done is unlikely to be amicable. Lord Hollick is reported to be unhappy to sell to Granada, as he believes it was Mr Robinson who persuaded the Competition Commission to recommend the unpalatable conditions on the Carlton/United link up. Either way the issue will be resolved by August 4th, as the City Take Over Panel has said that the various parties must make their intentions clear by then.

Mr Green claims he approached Gerry Murphy "a few weeks ago" as a fall-back in case the merger with United did not go through. The former Greencore boss had stepped down in February from his £750,000 a year job as chief executive of Excel, the logistics company formed by the merger of NFC and its rival Ocean. The connection with Mr Green was through Sir Christopher Bland, the former chairman of London Weekend Television and current chairman of the BBC and Excel. Of Anglo-Irish stock, Sir Christopher represented Ireland at fencing in the 1960 Rome Olympics and was a friend of Mr Green's.

Mr Murphy is on record as saying that he was spoilt for choice with job offers after leaving Excel and had half-a-dozen options. His new salary has not been disclosed. He says the situation in which he now finds himself is not too different from that which awaited him when he walked through the door of Greencore in Dublin at the end of 1991.

"I have got a lot to learn about TV, but I did not know much about logistics five years ago or sugar four years before that," he told The Irish Times this week.

Mr Murphy is not too concerned about working for the formidable Mr Green. "He is a hands-on chairman, but there is a lot going on. He is a big character, but I have worked with big characters before," he said. Among them was Bernie Cahill, the Greencore chairman. Mr Cahill was instrumental in the appointment of Mr Murphy to Greencore having got to know him when they both worked for Grand Metropolitan (Grand Met). Mr Robinson also worked for Grand Met, now Diageo, in the 1980s. What excites Mr Murphy about his new job is the opportunity to harness technology to exploit the full value of Carlton, not the prospect of a high-profile battle for control of ITV.

He points out that regardless of what happens during the next few weeks there will still be only two big players left in ITV, his company and Granada. "We have a common agenda. We are going to have to work together and I suspect we will," he said. Carlton and Granada already have a joint venture in on-digital, a pay-per-view digital TV venture.

Mr Murphy says he does not know Robinson well but "our paths have crossed". Like Mr Robinson he does not make use of his Irish connections to get ahead in British business circles. When pressed about his lack of experience in television, Mr Murphy points to Mr Robinson as someone who has not been held back by lack of such experience.

The 52-year-old head of Granada takes the comparison as a compliment and appears to have a healthy respect for his younger adversary. "The fact that Michael Green appointed him so soon indicates that he had doubts about the merger for a while. You don't just get a guy like Gerry Murphy off the shelf," he told The Irish Times, this week.

He also predicts that the two men will have a good relationship. There is a third player in the coming drama. Mr Charles Allen heads up Granada Media, which comprises the TV and other related interests of Granada, which has been floated as a separate company. Under Mr Robinson's close guidance he will be going head-to-head with Mr Murphy at Carlton.

Both sides accept that the prospect of a single company controlling ITV is at least five years away. At present there are too many regulatory obstacles. These include the restriction that no one company can own both the ITV franchises for London. Granada currently owns one - LWT - while Carlton owns the other. There is also a restriction that no commercial company can control more than 15 per cent of viewing share in Britain.

ITV at present has a combined 30 per cent share of viewing but it is declining at the rate of 10 per cent a year and will fall faster as the number of TV channels increases.

In addition, the Competition Commission has introduced a new rule that one company can own no more than two of the four licences that generate the most revenue. These are Meridian, LWT, Carlton TV and Central.

Most of these obstacles will be swept away in the coming Broadcasting Bill which is making its way through parliament, predicts Mr Robinson. He is confident that when it comes into effect in 2002 it will accept the overwhelming logic that ITV should become one single company in order to compete in a rapidly changing marketplace.

By the time this comes to pass Mr Robinson expects to be operating at one remove from the fray. He already splits his time between Britain and Raphoe, Co Donegal.

He plans to step down as chairman of Granada when its merger with catering group Compass is completed later this year, but will remain as a consultant to the group and a non-executive director of Granada Media.

No doubt he will have got to know Mr Murphy a good bit better by then.