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Last Updated: Tuesday, 18 July 2006, 16:39 GMT 17:39 UK
Tongues wag as SMG chief resigns
By Jamie McIvor
Business correspondent, BBC Scotland

SMG is in the middle of moving into its new headquarters on the banks of the Clyde - but Andrew Flanagan will not be settling in there.

SMG logo
SMG is moving to a new headquarters in Glasgow

His decision to resign, which takes immediate effect, came as a surprise to the company's staff and the rest of the Scottish media.

In a statement, the company did not say why Mr Flanagan had decided to leave but stressed it was a mutual agreement with the company's board.

Tongues will wag in the rest of the media - but SMG is dismissing suggestions his decision was anything less than voluntary.

Mr Flanagan has been SMG's chief executive for 10 years - a period of rapid and dramatic expansion for the company.

Growing fast

Indeed, when he replaced Gus (now Lord) Macdonald as chief executive, the company wasn't even called SMG. It was still called Scottish Television - and the business consisted of little apart from the ITV station for central Scotland.

Mr Flanagan took the helm as the company started to grow fast. It bought The Herald newspaper group, Virgin Radio and the cinema advertising company Pearl and Dean.

The ITV network was starting to consolidate and Grampian Television joined the group.

Moves were made which could have led to Border Television and Ulster Television being bought, but they came to nothing.

Chris Evans
SMG was involved in a legal wrangle with Chris Evans

SMG was on the hunt. It was determined to create a strong, multi-media business based in Scotland.

For years things were on track, but it was not to last.

The company became involved in a lengthy and embarrassing legal wrangle with the DJ Chris Evans after it bought Virgin Radio.

SMG's debt increased - a problem relieved by the decision to sell off The Herald.

The company always stressed this decision was a change of strategy, not a fire sale to pay off the debt - but it meant SMG had lost one of its most important brands within Scotland.

Plans for a takeover of Scottish Radio Holdings - the owner of many of Scotland's main local radio stations - also came to nothing.

Independent company

That company was later bought over by Emap, a media group based south of the border.

But any adventurer experiences failure and success.

Andrew Flanagan's greatest achievement is that SMG is still an independent Scottish company, one of the largest stock-market listed firms based north of the border.

For years, he has had to listen to siren voices predicting that a takeover was only a matter of time.

Andrew Flanagan
Andrew Flanagan's resignation was a shock to many

His decision to leave does not make a takeover any more or less likely.

The head of SMG's television business Donald Emslie will fill Mr Flanagan's shoes while a permanent replacement is found.

SMG's share price has been languishing. Its shares are now only worth about 75p - a few years ago they were worth three or four times as much. The news of his departure led, initially at least, to another drop.

Mr Flanagan has every right to feel proud of the fact that SMG is still an independent Scottish company - not part of a larger group.

But his spell in charge of SMG will be remembered by many in the television industry as a period which saw a dramatic decline in the amount of programmes made by the company for transmission within Scotland alone.

When STV retained its franchise in 1991 it boasted it would show 1,000 hours a year of Scottish programmes.

Growing competition

Now STV and Grampian between them show an average of just four hours a week of Scottish programmes along with the Scottish news. Many of these programmes are in late night slots.

Similar changes have taken place across the whole of the ITV network - a network under intense pressure from growing competition for the advertising revenue which is its lifeblood.

None of this is Andrew Flanagan's fault - the moves were agreed by the industry regulator.

But the decline in the amount of programming made in Scotland for Scotland is still a cause of sadness for many in the industry.

Scottish Media Group head resigns
18 Jul 06 |  Scotland

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