Can Carolyn McCall pull off an epic finale at ITV?

These haven’t been the easiest of times for ITV’s ambitious CEO Carolyn McCall.

Transforming a UK-focused terrestrial broadcaster into an international player in a rapidly changing media market is no easy feat, where the likes of Sky owner Comcast and Hollywood studio giants grapple with ever-changing technology and viewer promiscuity.

It doesn’t get any easier with the great British pastime of turning a daytime couch spat between sane presenter Holly Willoughby and Phillip Schofield into a sex-charged affair that has seen everyone from former ITV presenter Eamonn Holmes to veteran Warbler and defender of homosexuals, rights Elton John has an opinion.

The media frenzy saw McCall appear before MPs to be questioned about Ofcom rules and the announcement of a lawyer-led inquiry into the broadcaster’s handling of the case. Jane Mulcahy KC is expected to publish her price-sensitive findings on the response to the initial complaints of alleged misconduct by Schofield and ITV’s personnel department and senior management in early September.

All of this is a huge distraction to McCall as she has spent more than five years in charge of the broadcaster, with her determination to secure a transformative deal that secures ITV’s financial viability despite the limited resources of a second-tier creative player. and a lagging stock price amid moving tectonic plates.

In a past life, McCall resisted the slings and arrows of a powerful tormentor, founding shareholder Sir Stelios Haji-Ioannou at budget airline easyJet. She still has ambitions to do the same for ITV.

At the heart of the transformation strategy is its bid to expand ITV’s already significant production presence with the acquisition of All3Media, one of the world’s largest independent producers, at a potential cost of £1bn, depending on how the deal is structured . .

If realised, the transaction would add dozens of new production facilities and an eclectic range of new shows to ITV studios’ output.

Its creative output includes groundbreaking comedy-dramas such as Fleabag, the cuddly rural English favorite Midsomer Murders and Claudia Winkleman’s BBC series The Traitors.

As reported in yesterday’s Daily Mail, the deal also includes subsidiary Studio Lambert – the production company behind Gogglebox. The aim of an All3Media deal is to limit ITV’s reliance on the all-important but volatile linear advertising market for mass audiences. It would give the broadcaster a dominant future as a leading production house embracing streaming through its pioneering ITVX platform.

As a London-listed minnow in a world of successional media monoliths, British commercial broadcasting finds itself in a vicious and highly competitive market. How mean is shown by the misery of Sky owner Comcast, who paid £32 billion five years ago for British pay and sports television leader Sky after a blood-curdling battle with Rupert Murdoch’s Fox.

At the time, Comcast owner Brian Roberts saw Sky technology and its ‘Q’ boxes as transformational on a quick visit to the UK. He is now trying to pay off assets as quickly as possible to pay off debt and invest in new content.

“Comcast has never really made it clear why it bought Sky,” said Craig Moffett of research firm Moffett Nathanson. Comcast has already written off its European acquisition by £6.8 billion. More worryingly, the Premier League and other sports coverage are under threat from streaming operator DAZN and others.

Americans already have access to Premier League football through cable and streaming options. Roberts finds it hard to compete – just like ITV and the traditional Hollywood studios – with Netflix’s sheer volume of content and global streaming power.

McCall, advised by specialists Robey Warshaw and Credit Suisse, finds the case for a deal with All3Media convincing.

Already more than 50 per cent of ITV’s revenue comes from outside traditional advertising. The addition of some £867 million in sales (the figure in All3Media’s latest accounts) would make ‘independent’ studios the group’s dominant driving force.

Standalone ITV Studios is growing at 3 to 5 percent per annum and is a less volatile source of income for investors. But structuring the deal will be complicated. ‘Cable Cowboy’ John Malone’s Liberty will be crucial. Liberty owns All3Media with Discovery, which is part of the massive entertainment empire Warner Bros. Liberty also has a largely passive 10 per cent stake in ITV, which could help tip shareholders in favor of a transaction.

A £1bn deal for ITV, with a market value of just £2.82bn following the recent Holly-and-Phil wobble, would be a big ask.

Barclays thinks such a deal would be feasible with a mix of debt and equity and perhaps a larger, continuing stake in expanded broadcaster Liberty.

The deal would give McCall an exit route from what has proven to be a tough gig in the next year or so, and leave with his head held high.