TV bosses are forced to resign: Axe wielded at Yorkshire Tyne-Tees (CORRECTED)

CORRECTION (PUBLISHED 14 NOVEMBER 1993) APPENDED TO THIS ARTICLE

CLIVE LEACH, chairman and chief executive of Yorkshire Tyne-Tees Television, and the group's commercial director, Allan Hardie, are to resign tomorrow after being forced out by the group's two largest shareholders, LWT and Pearson.

The fate of the two, who have been blamed for the fiasco which led YTTV to sell pounds 15m more advertising airtime than it was able to deliver, was sealed at a secret meeting of the group's non-executive directors on Friday afternoon at London's Athenaeum Club, chaired by the TV veteran Ward Thomas.

YTTV admitted earlier this week that problems with advertising sales would mean the group was likely to make a loss this year.

Mr Thomas is expected to step into the breach as chairman until a new candidate can be found. An early favourite for the job is Dennis Stevenson, a non-executive director at Pearson who was recently appointed chairman of GPA, the troubled Irish leasing group.

Neil Canetty-Clarke, LWT's finance director, is also expected to help out in a move that may mark the first step along the route towards LWT assuming full control of YTTV.

Large ITV companies are currently prevented from merging, but the Government is expected to ease the rules next year. YTTV is seen as the perfect 'poison pill' for LWT, in which Granada recently bought a 20 per cent stake.

Friday's meeting was held at the behest of Pearson and LWT, both of whom own 14 per cent of the stock. Frank Barlow, Pearson's managing director, was understood to be a driving force behind the oustings.

Mr Leach claimed last week that he had the support of Greg Dyke, LWT's managing director and a non-executive director of YTTV. But by Friday, it had become clear that he could no longer rely on Mr Dyke's backing.

Industry experts have roundly blamed Mr Leach, who was paid pounds 432,000 last year, for the present impasse. YTTV, which was created out of the merger of Yorkshire TV and Tyne Tees last year, bid highly to retain its ITV franchises and will have to pay a minimum of pounds 53.3m to the Government this year in levy.

Mr Leach made confident forecasts that the company would thrive despite the high bids, but executives found it hard to meet his targets.

'The sales force were pushed so hard by the management that it is not surprising this problem has blown up,' said one insider.

After an earlier mishap, YTTV closed its advertising sales operation, Media & Airtime Sales, and contracted out the selling of its airtime to Laser, owned by LWT.

Many institutions questioned at the time whether the resignation of Craig Pearman, the sales director, was sufficient to address the problems.

Some believed that Mr Leach, whose background was in sales and who had formerly been sales director, should also have taken responsibility for the debacle.

Before taking over the contract, Laser discovered that MAS had sold pounds 15m worth of airtime it could not deliver. It has told YTTV to refund the advance payments.

Earlier this year, YTTV ran into difficulties with the Independent Television Commission when it attempted a radical restructuring of Tyne Tees. The episode led to the resignation of Ian Ritchie, managing director of Tyne Tees, and the plans were later modified.

Yorkshire warned last week that advertising revenues would be lower than expected. The company said that this combined with redundancy costs associated with the closure of MAS was likely to force it into losses in the year to 30 September.

Analysts estimate that revenues could be pounds 10m or more below original expectations.

Mr Leach becomes the first victim among those considered in the City to have hugely overbid for their franchises. GMTV, the breakfast time franchise holder, has also incurred heavy losses since outbidding TV-am.

CORRECTION

We said last week that Allan Hardy, the commercial director of Yorkshire-Tyne Tees Television, was being blamed for the overselling of airtime and was to be forced to resign. This was incorrect. The only board resignation has been that of the chairman and chief executive, Clive Leach. Mr Hardy remains commercial director, reporting directly to the new chairman and chief executive, Ward Thomas. We apologise for any embarrassment to Mr Hardy and to the company.

(Photograph omitted)