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Last Updated: Tuesday, 28 November 2006, 08:24 GMT
Grade departure 'leaves big hole'
Analysis
By Torin Douglas
BBC media correspondent

What is the significance of the BBC chairman Michael Grade moving to its biggest rival?

BBC Chairman Michael Grade
The appointment will cheer ITV and its shareholders

The appointment of the BBC's chairman to run the UK's biggest commercial television company, ITV, is remarkable, not least for its timing.

ITV has just rebuffed a takeover bid from Richard Branson and the cable company NTL, and seen almost 18% of its shares bought by the satellite company BSkyB, part of Rupert Murdoch's empire.

Michael Grade is another larger-than-life media figure to step into the high-octane ITV drama in recent weeks and he - unlike the others - has got his hands on the train set.

As executive chairman, he will be running ITV and so the long-drawn-out search for a chief executive is off. How he will respond to ITV's new biggest shareholder BSkyB remains to be seen.

He will relish the challenge of trying to improve the network's fortunes

Meanwhile, the BBC is in the final stages of negotiations with the government over its next licence fee settlement.

Under the new BBC Charter, Michael Grade was due to take over as chairman of the BBC Trust, which will replace the board of governors on 1 January. Instead he will be joining its biggest rival as executive chairman.

As a former chief executive of Channel 4, director of BBC Television and programme director at London Weekend, his appointment will cheer ITV and its shareholders, who have seen audiences and advertising tumble.

His uncle was Lew Grade, one of the founding ITV moguls, and he will relish the challenge of trying to improve the network's fortunes.

But he leaves a big hole at the BBC, as it moves into a new charter and system of governance, over which he led the negotiations and was expected to provide continuity.

Jeff Randall, of the Daily Telegraph, who broke the story, said Mr Grade's decision had come as a shock to the corporation.

On BBC News 24, he said very senior BBC figures had told him: "There is carnage inside the BBC, mayhem, people are incandescent with rage at Michael Grade's defection."

If so, that is not what the BBC was saying publicly.

In a statement, it said: "Clearly this is a surprise, especially at this moment. For the last two-and-a-half years, Michael Grade has been a great chairman, who along with the director general Mark Thompson has achieved a successful charter settlement for the BBC. We wish Michael well."

In some ways, BBC insiders say, this is not such a bad time for the chairman to leave.

The charter is secured for a further 10 years, with the BBC still to be funded by the licence fee.

Whoever takes over as chairman of the trust will have a critical role to play in the future direction and regulation of the BBC

The level of the licence fee settlement is in the final stages of negotiation, and will be announced shortly.

Mr Grade ensured that the new members of the BBC Trust have a great deal of experience in the media world, so there is a strong base to build on.

And, of course, it's the BBC director general Mark Thompson who actually runs the BBC day-to-day, not the chairman, who under the new system of governance has a more hands-off role.

Even so, whoever takes over as chairman of the trust will have a critical role to play in the future direction and regulation of the BBC.

Drama

Sudden departures are not new at the top of the BBC. Mr Grade was appointed two-and-a-half years ago as a steadying hand, after the previous chairman Gavyn Davies resigned - and the director general Greg Dyke was sacked.

That followed heavy criticism in the Hutton Report, prompted by the death of Dr David Kelly and the BBC coverage of the government's dossier claiming Iraq had weapons of mass destruction.

The chairman before that, Sir Christopher Bland, suddenly announced he was leaving to be chairman of BT.

Michael Grade's last move from the BBC was equally sudden. He resigned without warning in 1987 as managing director-designate of BBC Television to become chief executive of Channel 4 and, as now, the news leaked out the night before.

Who said the BBC has the best dramas?




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