For Broadcast May 28th, 2008

ITV should slash £150m from its original programming budget in order to regain the confidence of the market and its investors, according to Greg Dyke.

The former BBC director general was lukewarm about Michael Grade's 17 months in charge of ITV and said the executive chairman had "not been a great success". He warned that although ITV could still be turned around, "the decline is fairly fast now."

Dyke said ITV spends "twice as much" as any commercial broadcaster in Europe on original programming and told Broadcast that if he were in charge of ITV, he would cut £200m in costs, including £150m from its £1bn programming budget.

"In previous times, ITV has got itself out of difficulty by spending a lot of money on drama, but I doubt it can do that now," said Dyke.

Instead, his programming formula would be closer to a mix of entertainment, soap and sport. "Just look around Europe and see what works," he said.

Dyke said he accepted that ITV faces stronger competition from the BBC than most European commercial broadcasters do from their equivalent public service rivals, but said that in the past ITV had been run like a "semi-monopoly broadcaster".

"ITV has to accept that it is no longer going to be a 20% to 25% share broadcaster. It also probably needs to be part of a bigger group," Dyke said.

ITV rejected Dyke's suggestions. It said in a statement: "The ITV network programming budget will remain consistent in 2008 and will continue to be spent effectively, achieving the genre mix of programming that has allowed ITV1 to deliver seven out of 10 of the year's most watched TV shows [excluding sport and soaps], increase the volume of commercial impacts year-on-year and be forecast to significantly outperform the TV advertising market over the first half of the year."

Dyke missed out on the chance to run ITV in 2006, when he fronted a joint bid of 120p per share for the broadcaster from private equity investor Apax Partners, Goldman Sachs and The Blackstone Group. ITV's board spurned the offer, saying it undervalued the broadcaster, but its share price has since plummeted, languishing below 60p in the past week.

Dyke was discussing ITV as part of an interview for the Thinking Digital conference in Gateshead last week.