STV is making a profit. So why take the axe to its excellent current affairs output?

https://www.theguardian.com/commentisfree/2018/may/27/stv-axe-current-affairs-output-simon-pitts

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Scotland was treated to a rare but timely reminder last week of how industrial relations were conducted in the Victorian era. Perhaps we have become so accustomed to the benefits of workplace rights, trade union protection, the living wage and a degree of job security that we have grown soft. Our employment expectations have become so unreasonably high that there are risks to output and growth. And so from time to time we require to be shown how far we have travelled and that we ought never to be complacent about the privilege of work.

So hats off to Simon Pitts, the recently appointed chief of STV, Scotland’s largest and most successful independent television company. In a rare and thoughtful intervention he singlehandedly jolted us out of our complacency. There was STV, with its indolent journalists, camera operators and technicians idly making excellent news and current affairs programmes as well as creating high-calibre culture and entertainment. And there they were, doing it on a limited budget and still making £18m a year in profits. They all needed to be told how the real world works and Pitts is obviously the man to do this.

He recently announced that 59 jobs were to go, most of them from STV’s news division. STV2, the short-lived news and entertainment channel, is to be axed completely. One of Scotland’s most important public service broadcasters is to be hollowed out.

Another heartwarming characteristic of all of this has been a return to the often misunderstood remuneration and bonus culture prior to the banking crash of 2008. Pitts is pulling down an annual salary of around £400,000 – more than twice that of his counterpart at BBC Scotland – on top of his £850,000 “golden hello”. It’s this sort of return to “traditional” industrial relations that will get the Scottish economy back on its feet. Aye right.

In subsequent one-to-one meetings with stunned staff, it’s been claimed, some people were told their jobs were safe only to learn later the same day that their positions had been offered to others. The National Union of Journalists is investigating these claims. One source told me: “It’s clear very little of this has been thought through and that a bigger agenda is now in play.”

An accompanying press release, absolutely hoaching throughout with the meaningless and shallow argot of a corporate manual, began: “Comprehensive 3-year growth plan to focus the organisation on content and digital to deliver long-term growth for shareholders.” The 2,000-word press release was put together by Charlotte Street Partners, an Edinburgh lobbying firm with close ties to the Scottish government. Its managing partner, Andrew Wilson, is the author of the SNP’s long-awaited Sustainable Growth Commission report, which was unveiled on Friday.

I’m not sure the axing of 59 highly skilled Scottish jobs from a high-performing and profitable media company is quite how Wilson sees the nation’s future growth strategy. Scotland’s culture minister, Fiona Hyslop, wrote to the broadcast regulators Ofcom following the STV jobs announcement expressing concern about its future ability to meet its public service commitments. She could just have had a quiet word with Wilson, her former colleague in the Scottish parliament. It was also jolly decent of the lobbying firm to arrange an interview with Pitts in the Scottish edition of the Sunday Times, another of its clients.

It seems as though Pitts’s ridiculously swollen remuneration package and his “growth strategy” are being driven by the activist investor Crystal Amber. Its website offers a clue to what the STV strategy is really all about. It is “an AIM-listed activist fund investing predominantly in small and mid-cap UK equities where it identifies opportunities to enhance long-term shareholder value”. Crystal Amber holds more than 16% of STV stock, making it the biggest shareholder.

Pitts, who was a senior executive at ITV in London, could have had his pick of media positions in the UK and Europe, so why Glasgow? The STV share price took an immediate jump when the job losses were announced. When the process of stripping it clean is completed and the probable sale to ITV is concluded, Pitts and the big shareholders will fill their boots.

Capitalism’s most implacable outriders will merely shrug and talk about commercial enterprises having a fiduciary duty to shareholders. To describe STV as a purely commercial organisation existing at the whim of speculators and money-changers is a fanciful notion. It operates in a highly specialised and narrow field with limited competition, where it is permitted a licence to scrutinise and analyse the workings of democracy.

This brings an array of commercial advantages. To date, STV has done this admirably, especially in the past few years, where its news and current affairs output has been vital during a period of widespread political engagement in Scotland. Its two main news programmes serve the central belt and the north. It would be a tragedy for Scottish democracy if its northern programme were eventually to be sacrificed for Celebrity Love Island Naked Bake Off.

The official position of Ofcom as expressed to me is: “We would assess any request to vary the current licence requirements very closely.” But another source added: “If there was to be a reduction from two to only one regional news service, Scotland would lose much in terms of its regionality.” It remains to be seen how far this stark exercise in corporate asset-stripping will go.