Let’s do the easier bit first. I don’t think the Five decision has any major implications for ITN’s future, though it has undoubtedly damaged morale at ITN and is a considerable boost for Sky. The decision came as no great surprise to me. Five prefer to do business with BSkyB – a potential partner in all sorts of other deals – than with ITN’s dominant shareholder, ITV. And because Sky pays for its own news video, it can be more flexible in rights deals than ITN, whose video is all paid for by its customers.

It is sad for the Five News team, who’ve done a great job in difficult circumstances. But I suspect that Kirsty Young (who Five always insisted on employing directly rather than via ITN, presumably with this sort of manoeuvre in mind) won’t be the only Five team member to move across. More importantly I don’t think ITN’s bottom line will be significantly worse off, depending what use the company can make of the released newsroom space.

The most significant knock-on is the possible impact on ITN’s contract to produce Channel 4 News, which makes a meaningful contribution to ITN’s profits and to its prestige. I believe Channel 4 wants to stay with ITN, but is watching as closely as anybody the future of its news supplier to ensure it doesn’t get caught out by some “And finally” scenario. And Sky News will point out that it now has a bigger national news budget than the ITV News Service at ITN, and the gap is likely to get bigger.

But there is one root cause of all the uncertainty about ITN, a company whose output is seen in some form by more than 60 per cent of the British public every week. It is a long-running row about ownership; a very longrunning row. When ITV started, the different franchise-holding companies decided to set up a separate company to produce TV news for the network. They owned shares in it – effectively shares of the budgeted cost rather than of any profits – in proportion to their share of the ITV advertising cake.

So for an ITV regional company, a shareholding in ITN Ltd wasn’t so much a right as a required responsibility. No wonder Charles Allen, the chief executive of ITV plc, recently said that ITN “has had a tortured relationship in the past with the ITV mothership”. The first editor of ITN, Aidan Crawley, resigned after a year because of a budget row. Despite this, for the next three decades the ITV companies owned a news provider that wiped the floor with the mighty BBC, on-screen and in the ratings, and whose regulator called it “the jewel in the crown” of the ITV system. Yet the companies never seemed to enjoy owning it.

Burnet’s novel idea

In the late 1980s, ITN’s chief executive David Nicholas, together with its then most famous on-screen face, Alastair Burnet, came up with a novel idea: if the ITV companies weren’t that fussed about owning ITN, maybe they shouldn’t. Maybe other shareholders interested in growth and investment could be found. Nicholas and Burnet, in conjunction with Prime Minister Margaret Thatcher’s top advisers, then went one step further and began helping to construct a law that would prevent ITV owning a majority of the shares in its own news service. The ITN management was effectively getting Parliament to sack its owners.

So obsessed were the ITV companies with their own futures under the 1990 Broadcasting Bill that their parliamentary fight-back against Nicholas and Burnet was ineffective and the clause in the Bill went through. So did a further requirement, that no single company could own more than 20 per cent of ITN. But a trade-off meant that ITN had to give up its monopoly in providing ITV’s news.

Within a couple of years ITN had a new line-up of shareholders, including new ITV companies such as Carlton and non-ITV companies including Reuters. At one level, ITN appeared to be on a course to become an independent, multi-customer business that would seize opportunities as they came up. But behind the scenes, the ITV shareholders were focused on changing the law on shareholding, which had just come into effect. Their first target was to abolish the 49 per cent cap on ITV ownership. They were successful with this campaign, but the Conservative government of the time was reluctant to go even further in abolishing the limit on any one company owning more than 20 per cent of ITN.

It was difficult trying to run the company along the lines set out in the Broadcasting Act. Some shareholders around the board table really wanted to get back to ITV direct ownership and were keen to project ITN as a disaster area, even when it was making £20million profit a year. Some wanted to float the company. To bring about either scenario, all legal limits on shareholdings had to go.

It was Granada’s Charles Allen who first announced to the world in The Financial Times that ITN’s owners were planning to float it on the Stock Exchange. Media companies were in demand by investors; initial public offerings (IPOs) were an everyday event in the equity markets. ITN worked with investment bankers on a draft pitch to the markets. The feedback from potential investors was that they liked the look of the management and their ideas, but couldn’t understand why ITV had not yet given ITN a long-term news contract to help launch the float. Without such a contract, they reasoned, a float wouldn’t work.

What they weren’t told was that ITV, and Granada’s Charles Allen in particular, had an alternative strategy and wanted the freedom to switch to it. I was later to christen this ITV’s “float it or fuck it strategy”. Rather than get value out of ITN by floating it, the other way of creating value – though only for ITV shareholders – was dramatically to reduce the cost of the ITV news contract. It would save ITV money, plus it would reduce the market value of ITN, thus making it easier for ITV to buy out cheaply the non-ITV shareholders. To achieve this it would be necessary to put the news contract out to tender and, not for the first time, Sky News were happy to pitch against ITN.

It is arguable that, under competition law, such a large contract in this specialised market would have had to go to tender anyway, but I suspect that if the float had gone ahead that problem would magically have been solved. As it turned out, the fall in the value of media companies on the stock market killed off the last hope of the float. The tender was started instead. And it was for a news service to be called solely ITV News, thus removing ITN as an on-air brand.

ITN won the tender to nobody’s great surprise other than the Sky News management, who were proudly telling key staff on the day of the announcement that they had won. But the price was down from about £46million to about £35million. This was roughly half what ITV companies expected to pay for news when they originally won their licences, and the drop in price created more redundancies in a company which, in its drive for competitive efficiency, had nearly halved its workforce while doubling its output. Fortunately, ITN’s investment in new digital systems had created working practices which saved money in the newsrooms and could be used, in part, to protect news-coverage budgets.

A few other arguments...

So what next? The key factor is that the existing ITV national news contract runs until the end of 2008. As that date approaches, ITV plc – the merger of Carlton and Granada, which owns 40 per cent of ITN – will regularly point out to the three non-ITV shareholders, Reuters, United Business Media and the Daily Mail group, each with 20 per cent, that ITV has the power to make ITN relatively worthless by not renewing that contract. ITV’s alternative, it will emphasise, is to provide its own news output, having already brought the expertise of ITV’s and ITN’s key news managers in-house with the creation of the ITV News Group, covering both national and regional news.

Surely, ITV will say, this is the time to do a deal over the ITN shares and for the three non-ITV companies to leave with a few million pounds each. It’s a lot less than what they paid for the shares originally, but they have taken out some decent dividends over the years. The problem is that at least one of those companies, United Business Media, led by Lord Hollick, has a habit of sitting on assets until it has squeezed every penny out of them. Hollick made a lot of cash for United out of the clever deal he did with Charles Allen when he sold United’s ITV interests to Granada. Would he now play hard to get over the disposal of one of his few remaining TV assets?

But if, after the usual threats and promises, a deal is finally done, there is the option for ITV, as the new sole owner of ITN, to fold the company into ITV plc. All those years of rows about ownership would be over and ITV would successfully have returned to square one. It could then take a view about what it wants to do with the other businesses that ITN has successfully built over the years. Certainly the company’s video archive, which already manages and sells clips in ITV’s own archive, is a natural fit inside ITV plc – as a result of a partnership deal with British Pathé, the ITN archive is now the world’s largest commercial collection of news and history clips.

But there is an alternative scenario under which ITN could continue as a separate company. And the key to this is the position of Reuters. With all its own commercial problems of the past few years, Reuters has been corporately incapable of making major decisions about its future in television, and its ITN shareholding in particular. But now, having apparently turned its own corner, it may have time to ponder ITN’s future.

ITN Archive has done a good job selling Reuters’ enormous archive of video clips around the world – a rather better job than Reuters did itself. And Reuters respects ITN’s ability to customise the TV content it makes for different customers. It may just be that Reuters will consider its own interest in television enough to justify continuing its shareholding and developing ITN in partnership with ITV. I suspect it will all come down to Reuters’ business focus at the time and how much it trusts whoever is running ITV when the decisions are finally made. The non-ITV shareholders in ITN were not amused by the way ITV destroyed much of their shareholder value through the ITV News tender process. For its part, ITV will want to know what the advantages are of Reuters remaining on board, compared to ITV taking ITN completely in-house as part of ITV plc.

So the obituaries for ITN may be a little premature, although I suspect the race between survival and oblivion will be a darned close-run thing. If it does turn out to be the end, the spirit of ITN and the memory of the many extraordinary things it has achieved over 50 years will, I am sure, continue in the various successor newsrooms and also in the many executive offices at Sky News and BBC News now occupied by former ITN staff. And the pensioners in the ITN 1955 Club will still meet regularly to re-live past glories and complain even more about how things are definitely not what they used to be.