Monday profile: Teflon Terry will have his hands full at Channel 4

Published on Sunday 8 November 2009 19:03

THERE are some characters in business and political circles who appear to have nine lives. Business Secretary Lord Peter Mandelson, for one, never fails to amaze with his constant career resurrections – no matter what scandal has gone before.

Lord Terry Burns, who was last week confirmed as the new chairman of Channel 4 (C4), seems to be cut from a similar cloth.

The ex-Treasury mandarin, who has acquired the nickname "Teflon Terry" over the years for his ability to shake-off controversy, has been parachuted into the top job at C4 – much to the surprise of both analysts and the broadcaster's staff.

According to insiders, more than a few eyebrows were raised at C4's glass-fronted headquarters in South London when news of his appointment broke. Experienced media executives such as Richard Eyre, chairman elect of GCap Media, and former BBC director-general Greg Dyke were hotly tipped for the job.

The appointment of Burns, who has no direct broadcasting experience, hit the industry like a swerve ball. His name had not been linked to the position until rumours of his acceptance leaked out of C4's walls just a few days before the official announcement was made by Ofcom on Thursday.

Burns is perhaps best known for his tenure as permanent secretary to the Treasury between 1991 and 1998. He advised the former Conservative prime minister John Major during Britain's humiliating retreat from the exchange rate mechanism in 1992 but miraculously shook off all criticism and has since resurfaced in a number of prestigious financial and advisory roles, including chairman of Abbey. Burns was also chairman of Marks & Spencer between 2006 and 2009 where his tenure was marred in its closing weeks by a dispute over his departing pay-off.

The media community is divided over his latest reincarnation as a broadcasting supremo. While some privately accuse him of being an "unexciting" choice, others suggest his financial knowledge and political contacts are exactly what C4 needs as it faces a fierce fight for survival over the next three years.

Although he has never worked for a broadcaster, he has dipped one toe into the media world before when he was an advisor to Tessa Jowell on the 2005 BBC Charter Review. The findings of his report showed a sympathy for the struggle of commercial channels such as C4, which is facing a 150m funding gap by 2012. One of his key recommendations was for a portion of the BBC's licence fee to be shared around other commercial channels, which broadcast public service programmes.

The government has recently warmed to the idea of "top slicing", proposing that the licence fee could help fund regional news services on ITV and some children's content.

In their attempts to secure the future of C4, Burns' predecessor Johnson and outgoing C4 chief executive Andy Duncan applied to the government for a state bail-out, but their entreaties were summarily rebuffed. The government's preferred option was to encourage a tie-up between C4 and the BBC's commercial arm, BBC Worldwide. Despite detailed talks on a potential partnership earlier this year, Johnson and Duncan failed to agree terms with the BBC. Media analysts believe the tie-up is now a distant reality.

Burns will have to use every inch of his political and financial nous to carve out a survival strategy for C4. Analysts suggest his history working with the Conservative party is a particularly precious asset, given the impending general election.

Before Burns can turn his attention to a battle plan, though, he first of all faces a race against time to secure a replacement for Duncan, who is due to depart before the end of the year.

Both C4 and ITV have been scouring the market for candidates. ITV is also locked in its own leadership crisis as it desperately seeks two replacements for outgoing executive chairman Michael Grade.

Analysts say that the challenges facing the management teams at both C4 and ITV, once they are finally appointed, are gargantuan.

Sam Hart, analyst at Charles Stanley, explains: "There are massive structural issues in the TV market – the migration of audiences away from terrestrial channels and competition for advertising from other forms of media, especially the internet."

C4 has been criticised for being too slow off the mark when it comes to the digital age – in particular for failing to keep up with the rapid migration of viewers to the internet and other platforms such as IPTV, where viewers use the red button to access services.

Sources close to C4 say recruitment firm Zygos Partnership has been instructed to find potential replacements for Duncan from the digital media world.

While Burns, who is described by close acquaintances as a "friendly northerner", may not have been an obvious choice for the chairmanship, analysts suggest that if his financial and political acumen is combined with a chief executive with extensive knowledge of new media, they could make a winning combination.

As one analyst remarked: "Burns is also known as 'Lord Fixit' and C4 certainly needs to be fixed."