Carlton Communications

Carlton Communications was a British media company. It was led by Michael Green and listed on the London Stock Exchange from 1983 until February 2, 2004, when it was taken over by Granada plc to form ITV plc with Carlton gaining 32% of the new company.

It is most well known as the former parent company of Carlton Television Limited, but was also involved in several other media and broadcasting businesses. It was also a constituent of the FTSE 100 Index.

Early years
In 1967, Michael Green established a printing and photo-processing company, Tangent Industries, with his brother-in-law and his father-in-law, Lord Wolfson. In 1982, Green bought Transvideo, renaming the company Carlton Television Studios. A year later, the name was changed to Carlton Communications when the company went public. Soon after, the Moving Picture Company (MPC), Europe's largest video facilities provider, joined Carlton in a joint venture to acquire the U.K. subsidiary of California's International Video Corporation for £400,000. Carlton acquired MPC itself in July 1983 for £13 million, with Mike Luckwell as managing director of the enlarged company. During 1985 Abekas Video Systems was purchased for £30m, helping to expand the company's operations in the field of video editing and allowing Carlton to produce projects as diverse as commercials, rock music videos, and corporate videos. (Scitex Corporation was sold ten years later for $52 million). Green valued strict financial controls to allow cash flow, so when new companies were acquired the existing managers were retrained to Carlton strict accounting practices, resulting in higher profits. Carlton's gross profit reached £38.1 million in 1985.

Michael Green tried unsuccessfully to acquire a broadcasting station. He first tried for Thames (see below) before trying for LWT. The Independent Broadcasting Authority (IBA) intervened, allowing Green only a 10 percent share. In response, Green sold his existing 5 percent share for £1 million. Carlton also failed to win the direct satellite broadcasting franchise, which went to British Satellite Broadcasting (BSB). In 1987, Carlton acquired 20 percent of Central Television, finally giving Carlton its first stake in a broadcasting company. Bob Phillis became Carlton's representative on the board of directors, having previously worked for Central before joining Carlton as Managing Director. Carlton increased its portfolio of media companies with the acquisition of Zenith Productions for £7.3 million. Carlton purchased Skyscan, the satellite dish manufacturer, in 1986. The company was sold on in 1988 because of slow sales and continuing delays in new start-up television services. Carlton's biggest acquisition of the decade came in October 1988, when it bought Technicolor for $780m, which led to Carlton becoming the world's largest producer of videocassette duplication and motion picture film processing, serving Hollywood studios and software companies. A year later, Carlton bought United Engineering Industries (UEI) plc for £580m, incorporating Quantel and Solid State Logic, which designed and manufactured professional video and sound products. Carlton later disposed of Solid State Logic in 1999 and Quantel in 2000.

Thames
Carlton Communications' most significant move was to outbid Thames Television for the ITV London weekday licence in 1991. In 1985, Carlton executed a failed take-over bid for Thames after Thorn EMI and British Electric Traction decided to sell its share of Thames. The deal was blocked by both Richard Dunn, Chief Executive of Thames, and by the IBA, who concluded: "the proposal would lead to a major change in the nature and Characteristic of a viable ITV programme Company". Michael green was left "bewildered" saying "we are surprised at the IBA Decision, I'm absolutely certain it would not have been a major change to Thames. We have always suggested that we would make absolutely sure that the company would continue to be what it is at this moment in time". The IBA stated they had nothing against Carlton owning part of an ITV company but believed any single ownership of an ITV company was undesirable. Thames then proceeded to have a management buyout and were floated on the Stock Exchange. A year later Mike Luckwell who preferred to defy the IBA left the company, selling his shares for £25 million.

It has been said that Carlton Chief Executive Michael Green talked to the then Prime Minister Margaret Thatcher on the matter, which in turn may have helped to shape the 1990 Parliamentary Act which replaced the IBA with the Independent Television Commission and the change in franchise allocation procedures. Carlton Television had a policy of being a 'publisher-broadcaster', not producing any programmes of its own; even its news was outsourced to London News Network. By 1994, the ITC criticised the channel for its "poor network programming" and said further improvements could be made.

1990s
In January 1992, Carlton strengthened its media library when it acquired Pickwick Group, which in turn was re-branded and merged with the existing Carlton library to create Carlton Visual Entertainment. The company acquired a 20% stake in GMTV a month after it won its ITV Franchise 1991 and bought 18% stake in Independent Television News in 1993. Carlton increased its stake in Central Television to 81% in 1994 and two years later added Westcountry Television to its portfolio. The acquisition of Central made Carlton one of the largest television producers in the UK, when include Action Time and Planet 24 were added to Green's empire.

Prime Minister David Cameron became Director of Corporate Affairs for Carlton from July 1994 to February 2001, his only venture into employment outside of the political world. Within six months the Company expressed their concerns that the government "must allow ITV firms the commercial freedom already granted to the BBC to expand their businesses abroad" and that the restrictions of the 1990 Broadcasting Act should be replaced by normal competition policy, allowing further consolidation among ITV companies.

Carlton expanded its non-TV interests by acquiring the cinema advertising company Rank Screen Advertising, renaming it Carlton Screen Advertising, and strengthened its control when it acquired Cinema Media, the UK’s biggest cinema sales house at the time from Schroder ventures. In 1997, along with Granada plc and British Sky Broadcasting, Carlton bid successfully for the UK national digital terrestrial television licence. Sky was excluded from the eventual company, ONdigital, for competition reasons, and this marked the start of Granada and Carlton working more closely together.

In early January 1999, the company bought ITC television and film library from PolyGram/Seagram for £91 million, which reunited the programme library of Associated Television and Central Television and  doubled the stock of its library division Carlton International, by giving it a total of 15,000 hours of programming. Carlton chairman Michael Green said: "The ITC library is a jewel in the crown. We can now unite it with the other gems from Britain's film and television heritage in our excellent library". From September 1999, Central and Westcountry Television were re-banded the on-air to Carlton. This later paved the way for the eventual downgrading of all of ITV's regional identities, though the names were never fully dropped as their news programmes Central News and Westcountry Live continued, and eventually returned to the air (albeit as ITV1 Central and ITV1 Westcountry) in 2004. In 2000, United Business & Media proposed a merger with Carlton. However, the parties were outmanoeuvred by Granada, who took over only the television interests of UNM (the rest of the company remains in existence). HTV's broadcast sides and ITV franchise rights (though not the majority of its production facilities) were sold to Carlton for competition reasons, becoming the company's final major acquisition.

In 1999, Technicolor continued expansion with the acquisitions of wholly owned businesses in Canada and Australia and started the development of digital cinema within two years. In 2001, Technicolor was sold to Thomson multimedia for $1.9bn and in 2002 ITV Digital (the renamed ONdigital) collapsed.

In late 2003, Carlton and Granada finally agreed to merge. While described as a merger, it was essentially a takeover by Granada - the Granada shareholders would own two-thirds of the new company, Charles Allen would remain as Chief Executive, and Michael Green would depart the company he had built. After the merger, the Granada brand would remain as the name of the Granada Television and of the Granada Productions brand. In contrast, the Carlton franchises dropped the Carlton name for local programming from the day of the merger (2 February 2004) with the Carlton network production brand disappearing from 1 November 2004; even the London weekday franchise started trading as ITV1 London (Weekdays), and was operationally (though not legally) merged with London Weekend Television as ITV London. The Carlton brand, which is now only used by Carlton Screen Advertising (and then only in the Republic of Ireland and Northern Ireland), is owned by Dermot Hanrahan.