Belfast Telegraph

What next for UTV after boardroom split?

Intrigue at the heart of one of the province's most successful companies creates vacancies at the top table

By Margaret Canning

Thursday February 23 started off as an ordinary day in UTV Media plc, one of three publicly-quoted companies in Northern Ireland.

Chairman John B McGuckian, who is in his early 70s, handed in the keys of his S Class Mercedes company car to reception at Havelock House for a routine valeting, ahead of what was supposed to be a routine board meeting.

Instead, the board voted to remove their top man in one of the most dramatic showdowns in Irish corporate history.

Afterwards, Mr McGuckian, aka John B and a prominent industrialist with a track record inside and out of UTV, got a lift from his friend and fellow ex-board member, Kevin Lagan. The Mercedes remained in the UTV car park at Havelock House, the company's south Belfast headquarters.

The veteran chairman had been in his post since 1990 and was in the business for 42 years, following in the footsteps of his father, also John, who was involved in the early days of the company.

UTV claimed the board removed John B because the majority believed his closeness to Irish investment company TVC - which has an 18% shareholding in UTV - was compromising his independence. Mr McGuckian then resigned as non-executive director, along with board members Shane Reihill, TVC executive chairman, and Kevin Lagan. In a statement, Mr McGuckian and Mr Lagan said the former's removal was in breach of the UK Corporate Governance Code.

Its share price spiked at a seventh-month high of £1.37 after the announcement - having fallen to £0.92 in December last year. Yesterday it traded at a high of £1.39.

An interim report for the six months to June 2011 recorded pre-tax profits of £10.9m, up 15%.

TVC has had an 18% holding in UTV since 2008 and Mr McGuckian joined its board in 2007.

We can only guess at the atmosphere inside that fateful meeting in the UTV boardroom.

Roy Bailie, Helen Kirkpatrick, John McCann, Scott Taunton and Norman McKeown remain on the board, with Helen Kirkpatrick acting as interim chairman.

UTV is not making any further comment and said it is in a "closed period" ahead of its results on March 20.

But those who have followed UTV say it has it bounced back from forced chairman exits in the past.

Hugh Oram, a Dublin-based journalist, broadcaster, author and media commentator, said: "For decades, Brum Henderson ran UTV almost as his own personal fiefdom.

"He was autocratic and to many people inside the station, overbearing.

"When he was removed from control of the station, it caused a major frisson, but the company survived and continued to prosper, even though it lost a lot of its glamour. The "suits" had taken over."

While Mr McGuckian may have gone from the board of directors, he still has a substantial shareholding.

And TVC has its stake - and John B sits on the board of that company.

Mr Oram said: "John McGuckian has had such a close connection with UTV for so long, 42 years in fact, that I can't see him riding into off into the sunset and keeping quiet about the future of the company.

"He still has a huge behind the scenes influence because nearly all of TVC's assets are in UTV."

The relationship between the two Johns is cited by one observer as the heart of the matter.

"Essentially there have been two men at the top of UTV, John McCann and John B," said the observer.

"Both could lay claim to be the people who made UTV.

"They are the two architects of the company as it is now.

"One could not have done it without the other."

He credited Mr McCann, an accountant by profession who is nudging 60, with masterminding "an incredibly diverse strategy" for UTV.

From a mere Channel 3 licence holder it is now a business with new media interests, radio licences all over Ireland and the owner of cash cow TalkSport "one of the biggest radio brands there is".

Our observer said: "He managed to diversify it away from a one-trick pony but John McCann couldn't have done that without the business brain that is John McGuckian.

"There has been an incredible partnership between the two of them."

John B, who still lives in the house at the heart of his father's former pig farm in Cloghmills, Co Antrim, is summed up as "a big man with a big personality, with proven ability away beyond the media."

As John B takes stock, the observer believes John McCann will not be relishing the focus on his company.

"He does not like any media attention on his company and had managed to keep it away from the headlines for most of the last 20 years so this will cost him all kinds of upset and sleepless nights."

Either way, Mr McCann will miss his former right-hand man. "It's like Morecambe losing Wise and Morecambe going out to find a partner without him."

UTV watchers are also intrigued about who will succeed John B as chairman. Could John McCann step into his shoes?

Some say Scott Taunton, managing director of radio in Great Britain, is John McCann's "heir apparent" as chief executive.

Mr Oram said: "The Australian Taunton has been with UTV for 12 years now and he's been the driver on the radio side, which itself is the driver of UTV's fortunes, with 16 radio stations in the UK and five in the Republic.

"Radio has been the big influencer in UTV's changing fortunes over the past decade."

Meanwhile, another media watcher is full of praise for Mr Mc Cann. "I think he's terrific. I think he's got great vision, great leadership style. I think he has probably one of the best business brains in the province."

As to the future: "Having nurtured the business and brought it on to where it is now, it would be quite fitting for him to become chairman." And it's radio where Mr Oram says the future of the company will lie. "It's not beyond the bounds of possibility that UTV, the only stand-alone ITV contractor left, could throw in its TV fortunes with ITV and concentrate on its radio operations. UTV could also devote more energy to developing its new media operations.

"So will the day come when UTV will represent radio and new media, but not television?"

Its ITV franchise is also up for renewal, as broadcast regulator Ofcom explained.

"UTV's licence along with the other Channel 3 licences in the UK are due to expire on December 31, 2014," a spokesman said.

"We are obliged to send a report to the Secretary of State at the Department of Culture, Media, and Sport on the future of both Channel 3 and Channel 5 licensing by June 2012."

John B McGuckian, meanwhile, will be busy with other interests. TVC has cash and government bonds of £60.8m. What it chooses to do with that is uppermost in the minds of UTV's top dogs.

Hugh Oram said: "One thing's for certain - in an era of unprecedented media change, as UTV prepares to abandon analogue for digital in October, a key person calling many future decisions in UTV is going to continue to be John McGuckian, even if it's indirectly rather than directly."

Stay tuned.

Who was who on the day before the shake-up at Havelock house

UTV Board of Directors on February 22:

John B McGuckian, aka John B

A prominent industrialist whose family made a fortune from pig farming. Removed as chairman and resigned as non-executive director

Shane Reihill

Executive chairman of TVC Holdings, which owns 18% of UTV. Resigned as non-executive director

Kevin Lagan

Co-founder of building giant The Lagan Group. Resigned as senior independent director

Helen Kirkpatrick

Interim chairman and non-executive director. Works in corporate finance section of Invest NI

Roy Bailie

Non-executive director. He is the chairman of printers W&G Baird (Holdings) Ltd

John McCann

Group chief executive. Joined as financial controller in 1983

Scott Taunton

MD of the radio division in Great Britain. Joined from DNA, an internet company UTV bought and rebranded as UTV Internet

Norman McKeown

Group finance director since 2008 after leaving pharmaceutical packaging company Sepha, where he was MD

Popular

From Belfast Telegraph