The MT interview: Michael Grade

He's not shy, he's not retiring and he's definitely not agitated. But our home-grown media mogul will need all his heavy-duty management experience in broadcasting to revive an ailing ITV. And with Murdoch to the right and Web 2.0 to the left, does the old stager have new ideas?

by Matthew Gwyther
Last Updated: 31 Aug 2010

It's not often a personality gets profiled twice in MT. Michael Grade is, however, an exception. In UK business, serious, three-dimensional characters with a sparklingly varied CV, reels of Technicolor back-story and yards of fruity anecdote require dedicated hunting down. And those that possess these attributes are often silenced by the anxious, dead hand of the corporate PR machine.

How many business folk do you know who arrived at their first job at the Daily Mirror, aged 17, in their father's chauffeur-driven Bentley? Or who welcomed Eric Morecambe, Arthur Askey and Jimmy Tarbuck to their first wedding? And few have risen to the heights of being named the UK's 'Pornographer-in-Chief' by the Daily Mail. Nor were many deserted, aged 15 months, by their mother, refusing to speak to her again. You could write a book about Grade. Indeed he did so himself - an autobiography entitled It Seemed Like a Good Idea at the Time (Macmillan 1999), a proper-page turner.

We first put our tape-recorder under his nose back in November 2000. The then 57-year-old Grade was behind a desk at Pinewood studios, his glory years as boss of Channel 4 and director of programmes at the BBC behind him. He was, our interviewer found, 'a changed man. After years of therapy he has mellowed, become less agitated. He has started a new family and, by day, spreads himself across a wide portfolio of non-executive roles.' This situation mystified MT slightly and we naturally asked if he wasn't tempted by another full-time job. He shook his head. 'I love this peripatetic life,' he replied and took another drag on his cigar.

So here he is, eight years later, executive chairman of a plc, in his big glass office in Norman Foster's ITV building on Gray's Inn Road, central London, with one of the biggest and hardest full-time jobs in UK media to hold down. And a tough gig it has proved, too.

So how agitated is he now? 'Agitated? I've never been agitated! I never have been agitated. I'm passionate - that's a different thing entirely, passionate about what I do, the people who work for me, the talent who work with us. I'm completely passionate - I've never been agitated!'

OK, alright, you've never been agitated. He is half-joshing, semi-feigning indignation, but he's not finished - this epithet has needled him. 'I've never been agitated. Anyone who's observed me over the years ... I can't understand where that word comes from.' OK, OK - he's a Buddhist in the agitation league. But why did he do it - why get back into the maelstrom?

'Well, your life changes. I've never planned my career. I've always worked on the basis that you do whatever job you do and you do it to the best of your ability. New opportunities open up ... ' He tails off for a brief repose. 'My world turned upside-down really with the move to the BBC. (He was brought in as chairman in 2004 to steady the ship during the post-Hutton hurricane, and then departed again in dramatic circumstances.) That was kind of coming back to the media, which I never expected to do. It was a huge change for me, and that was kind of a seminal moment. And, having got to the BBC, done what I had to do there, I realised how much I missed the media, and I realised also that I had a backlog of experience that was available to people, and it's frustrating not to be taking part. It got my juices going again.'

His departure from the BBC left many inside the corporation fuming at such a 'betrayal', just when negotiations with the Government over the corporation's new charter were at a crucial point. Grade won't have any of this. 'The majority of staff at the BBC can't believe anyone would want to leave - it's like renouncing the faith and I've done it twice. But I'm a free agent.'

But he has got people - not just at the BBC but all over medialand - wondering what he has let himself in for. One witty City analyst described Grade's job at ITV as being like 'catching a falling knife'. So does it feel as dangerously tricky an endeavour? Is it the most difficult job he's ever done? 'No. It's difficult, it has its challenges. But business has turned much quicker than I thought we'd be able to do it, because work had been done before I arrived.

'We had a very good 2007. I'm not talking about financially but I am talking about audience numbers, show revenue and the way things have gone. This business is definitely on the up. By any key performance indicators the business is on the way up. It's well founded, it's a great business, with great opportunities. It's less difficult now I've got the people in place - I've recruited a team of Galacticos in every department.'

This is a brave face and, as it has now seen the passing of 65 years, starting to look its age. Today, we have no trademark red braces, no big Cuban cigar, although he still sports the showpiece red socks. He's quite short on gags and fizzing energy. It's a serious job with serious issues that need tackling and, to tell the truth, he appears a bit knackered, a wee bit under par. Maybe it's no wonder.

If one is to judge by the share price alone, ITV looks like a sick beast indeed. When the BSkyB raiders came abseiling down in December 2006 to wreck the plans of Richard Branson, it picked up its 19% tranche of ITV's equity at 135p a share. Since then, the stock has been on a vertiginous fall: a year ago it had dropped to £1.10, and then went down to a pound last October, and, as sentiment hardened, fell below 70p in January this year. That was the lowest it had sunk since Carlton and Granada merged in 2004 - and, incidentally, this meant that Sky was looking at a paper loss of nearly half a billion pounds on its spoiler stake.

The slump was humiliating because January was when, accompanied by a big drum-roll, ITV revealed its 2008 programme schedule. This was the Big Push in ITV's fightback, with Grade leading, Henry the Fifth-like, from the front. There was a clutch of fresh, home-grown dramas, including a satire about the young British royals, the revamped News At Ten, plus the innovative Moving Wallpaper and Echo Beach.

The new schedule took the hand-to-hand ratings fight to the BBC: the Battle of the Bongs, as Sir Trevor McDonald was wheeled out from his retirement home for broadcasting gentlefolk in an attempt to splashdown the BBC's Fiona Bruce to the studio canvas.

The dramas have done passably well and attracted encouraging remarks from reviewers and advertisers, who noted they were a vast improvement on the cheap-and-nasty CCTV-clip shows of the previous regime. The News At Ten push hasn't worked, however, and by mid-February the BBC's 10 O'Clock News was attracting nearly twice as many viewers as ITV.

It's all very frustrating, as one senior ITV insider acknowledges. 'Listen, if we put Morecambe and Wise on every night and got 25 million viewers, the share price would still be in the toilet. It's very tough across the whole quoted media sector at the moment and we're faring no worse than anyone else.'

And now a possible economic slowdown looms, with the inevitable tightening of belts and cutting of advertising budgets. In sport, the helpless home nations have failed to get a team into Euro 2008, which is very bad news for commercial broadcasters. The whole phone-in scandal was beyond tawdry in its cheap deceit.

And, all the time, Grade has had to deal with the entirely unwanted distraction of the Murdoch clan sitting on a huge slice of his shares and cramping his style - an issue that will not be resolved any time soon, because Sky will fight the order from the Competition Commission to sell down its stake to 7.5%.

So how does he get on with Sky? Is it a silent elephant in his boardroom or a companionable help? 'I see it only as a possible barrier with a power of veto, in a position to block something that the overwhelming majority of our shareholders would like us to do.'

What might that be, then? 'It could be a takeover, it could be a merger, it could be fundraising, it could be anything that requires a resolution - which required 75% of votes cast on the day. Sky would be in a terrific position for its own commercial reasons to thwart the wishes of the overwhelming majority of our institutional and retail shareholders.'

It has been said over recent years that one of the problems with television has been the lack of imagination of those who run it. It has become a business led by technocrats, accountants and marketing bods, when it required someone with a bit of sawdust and tinsel and a shot of razzamatazz running through their veins. Someone who could get down and schmooze the likes of Ant and Dec, when all the nastiness of viewer phone-in shake-downs looked as if it might rub off on them. Did he agree with that?

'I am not sure I would address it quite as starkly as that. What I would say is that there is a moment in any business's lifecycle where it kind of stalls, and to get it moving off the plateau you do need a leader who really understands how the business works, how it comes together. And that, I think, is where ITV had got to when I was brought in.

'What did Marks & Spencer need? It needed a retailer to sort the business out, which Stuart (Rose) has done. I'm not saying this business can only be run by someone with a background, but there is a moment when, actually, to get the thing back on the rails, you've got to be a railway man.'

And Grade is the railway man with probably the longest pedigree in UK television, the nearest thing we have to a home-grown media mogul. His father Leslie and two uncles, Lew and Bernard, were the three sons of the legendarily larger-than-life Olga Winogradski who, with her husband, had escaped anti-semitic persecution in Tokmak, Ukraine in 1911 and settled above a shoe shop in Brick Lane, in London's East End. The family was poor but the brothers got into competitive dancing in music halls - Leslie won a Charleston competition and his mother sold the 24 bottles of brandy that formed the prize to clear her debts and pay the rent. The trio progressed to organising shows and then managing talent. Michael's father booked the likes of Bob Hope, Doris Day and Danny Kaye. Uncle Lew went on to run one of the new commercial TV companies, ATV.

This, then, is Grade's world - and it had a smattering of Hollywood thrown in when he took the LA shilling in the early '80s for a spell with Embassy TV, which made sitcoms.

The question has to be: is he the right man for the job now? Critics suggest that Grade would have been great to lead ITV in the late 20th century but isn't the right person for the 21st. He says himself that he's already searching for a new executive boss for ITV.

Rupert Howell, whom Grade has brought in to run ITV's commercial side, strongly disagrees: 'Michael is perfect for TV - he sees the big picture, he cares about the right things, he is a powerful motivator, and he's terrific to work with. He's one of the main reasons I took the job.'

One observer from an organisation that places many million pounds' worth of ads heard Grade at an industry bash just before Christmas and was dismayed. 'It was the same old Michael but I was appalled at what he was saying. The suggestion was it could all be cured by a return to the good old days. It can't. ITV needs new ideas and formats that can cope with the new landscape.'

Many have derided ITV's attempts to tackle the internet. Its main foray into this area was the purchase two years ago for £120m of Friends Reunited, which is no longer regarded as being at the cutting edge of the internet. To attend a dinner party of the chattering classes in 2008 and start banging on excitedly about your recent encounters on Friends Reunited would be likely to provoke sniggers.

Although it had a huge headstart on more recent social networking upstarts, Friends Reunited has fallen way behind them in traffic levels. Facebook attracted about 8.5 million monthly users in January, MySpace 5.0 million, Bebo 4.1 million and Friends Reunited 1.6 million, down 47% year-on-year. Friends does, however, charge for membership.

Grade is having none of this net snobbery. 'We're going to keep it, that's the first thing. And, secondly, we are gently thinking about repositioning it in the market. It's a hugely profitable business, it keeps growing, it's in the sweet spot of the web, it's not a fashion item that is going to be overtaken - because it has a good core proposition, which is extendable. We do genes, we do dating, as well as simply the Friends Reunited.

'You know, people talk about YouTube and the rest - they're not competing with Friends Reunited. That's like saying Radiohead is competing with the Beatles - it's just a different market.'

This is fair enough, and persuading participants to part with hard cash to use a social-networking site is an achievement in itself. But isn't one of the grisly problems with the web - as News Corp has discovered with MySpace - that you can go in there and buy one of these portals at great cost only to watch with horror as some new fashionable, low-cost start-up muscles in and eats your lunch?

'But Friends won't go in and out of fashion because it's middle-market,' he counters. 'It's middle- and up-market. It's not a kids' fad. It's not cool. I don't want it to be cool. In the old days in London, in the heyday of discotheques, if you were in the discotheque business, the last thing you wanted to be was cool, because you can be cool and have the in-crowd and, six months later, someone else will open up down the road and the crowd would just leave. Annabel's is not cool, but it's still there 30 years later.'

This is an important part of his steadying philosophy at ITV, designed to stop the ship rocking with anxiety. He refuses to run round like Chicken Licken saying the media sky has fallen in and that digital has changed everything. He doesn't buy the argument that, for television, the paradigm has changed for the worse, especially in its relationship with the young.

'There has been no reduction in the amount of time people watch television. When you look at the number of hours a week people watch and if you track it back 10 years, it has not moved - it hasn't gone up, it hasn't gone down. It's solid as a rock. What happens within the demographic groups, or the age groups, is that there is some volatility, kids are playing with PSPs (PlayStation Portables) or whatever they are playing with ... '

So what is his son up to at the moment? (Grade has a small boy from his third marriage.) 'My nine-year-old Samuel watches quite a bit of TV, he watches the History Channel, he watches Discovery, CBeebies, CITV, The Simpsons, Coast, X-Factor. He's got eclectic taste. He plays his Nintendo. He plays his Pokemon cards and is always on the phone to his chums about a card that does a 34 damage. I don't know what on earth he's talking about. It's hilarious.'

So you're saying that all this scare stuff about kids not watching TV is untrue. 'The point is they never did!' He laughs.

Well, you and I did, didn't we?

'I ran my family business. I don't think I'm typical. After all, we owned the network,' he says, chuckling.

Although Grade's father and uncles were extremely wealthy, he isn't. In It Seemed Like a Good Idea at the Time, he writes of his 'frustration that British television could not offer the rewards to match my tastes'.

There is a terrific anecdote in that autobiography where in 1983 he gets given a Christmas bonus envelope by his Los Angeles boss: 'I opened it when my car was halted at some traffic lights, recalling my Christmas bonus the year before from LWT: a bottle of whisky, some shortbread biscuits and a £5 Marks & Spencer voucher ... I opened the envelope and found a cheque for $75,000, as much as my yearly pay from LWT. At a stroke, I was able to pay off my overdraft and clear all my debts in London.'

He has two divorces behind him and has been generous with his time for good, low-financial-return causes, including Index on Censorship, WWF, Charlton Athletic ('stuck with them through thin and thin') and the Dome (he was entertainment supremo), which was completely unpaid. It's said he took the ITV job because this was probably his last big chance to make a substantial pile - his basic salary is less than a million but over three years his share options could have made more than £7m if they had not been so far under water you can barely see the bubbles.

He brushes off this argument. 'If I was ruled by money then my career would have taken a very different turn: I would never have worked for the BBC ... There are lots of things I would never have done. I like to be paid the rate for the job, but I don't come into work on the basis of my remuneration. It would offend me to be paid less than I think I'm worth - because I was an agent and negotiated for a living. I'm here to do a job at work and I want to be in the position to hand it on to a chief executive in a couple of years' time, in a helluva lot better shape than I found it.'

But how much longer do you want to carry on doing this? 'Well, sadly, my Dad died very young, he was very sick, having got typhoid in the war. And he was a phenomenal worker and brilliant entrepreneur. He then had a stroke when he was still young, and he struggled for a long time, but he and Bernie went on, empire-building with the next deal. Bernie did a management buyout and created First Leisure at the age of 72!'

And is Grade happy to follow in that vein? 'My family don't retire. We're not retiring people. We're not shy and we're not retiring (laughs). I will retire when the phone stops ringing and people stop asking me to do interesting things, and I'll leave the stage very quietly. I love working.'

FOUR CHALLENGES FACING GRADE

1. To find decent programme ideas that millions will wish to watch

2. To persuade the City and ITV shareholders that he understands the new media landscape, as well as the old

3. To continue to appear confident that a remedy for the company is achievable

4. To decide when to bow out gracefully

GRADE IN A MINUTE
1943: Born 8 March, London. Educated at Stowe and St Dunstan's College,
Catford
1960: Trainee journalist on the Daily Mirror sports desk
1966: Theatrical agent with the Grade Organisation
1969: Joint MD, London Management agency
1973: Deputy controller of programmes, LWT, later rising to board member
1982: President of Embassy TV, Los Angeles
1983: Chairman and COO, the Grade Company
1984: Director of programmes, BBC1, then director of programmes, BBC TV
1988: CEO, Channel 4
2000: Chairman, Pinewood Studios
2004: Chairman of the BBC
2006: Executive chairman, ITV

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