Grade quits BBC post to join ITV

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Michael Grade has resigned as BBC chairman and is to join ITV, the corporation's main terrestrial rival.

ITV, which has been struggling with falling advertising and ratings, said the appointment was a "real coup".

Mr Grade said his first priority would be to improve programming at ITV, which he will join early next year.

Analysts say it is a major blow to the BBC, where Mr Grade was steering it through complex licence fee negotiations with the government.

The BBC said it was "disappointed" by Mr Grade's decision to leave but added that he had been an "inspirational leader".

Mr Grade had been due to head the independent BBC Trust that was to replace the Board of Governors from January and oversee the BBC.

Current BBC vice-chairman Anthony Salz will succeed Mr Grade until the end of the year, while Chitra Bharucha, vice-chairman of the new BBC Trust, will take up the position on a temporary basis until a new chairman is appointed.

ITV has been looking for a new boss since Charles Allen left in August.

Its shares rose more than 1% in early trading after news of Mr Grade's appointment was announced.

Mr Grade will run the company as executive chairman, and is expected to hold the post for up to three years.

Acting chief executive John Cresswell will work with him as chief operating officer, while chairman Sir Peter Burt will step down in March.

Mr Grade said it was a "great privilege" to take on the role.

"It has been a tough career decision to leave the BBC but it was an opportunity I could not resist, given my family's history in the founding of ITV and my background at London Weekend Television," he said.

He said his first priority would be speed up improvements to ITV's programming schedule.

"I think they need a bit of creative leadership," he said. "That is what is missing here."

He also refuted claims that he had been lured to ITV primarily by the promise of a massive salary increase.

Commentators have suggested that a pay packet likely to exceed £1m a year - as well as a sizeable slice of shares - would have been a factor.

"You never do a job for the money," he said. "You do it because you want to do it and think you can do it."

Analysts said that Mr Grade was a charismatic figure who could restore confidence in ITV and help the company attract advertisers.

They added that Mr Grade was one of the few figures in the media industry with the experience and skills to take the helm at ITV.

"For the first time in ages, ITV executives can afford a smile," said Robert Peston, the BBC's business editor. "They've got a new boss who has television in his blood."

Question marks have hung over ITV's future in the face of rising competition from digital TV firms, low viewing figures and falling advertising revenues.

Many analysts had predicted that ITV would become a takeover target, and satellite broadcaster BSkyB has bought a 17.9% stake in the firm for £940m.

ITV had previously rejected a £4.7bn-takeover offer from cable operator NTL.

ITV said Mr Grade's appointment was a "real coup" for the firm and he would bring "unrivalled broadcasting experience" to the business.

Mr Grade's departure is problematic for the BBC, which will have its third new chairman in seven years.

He was heavily involved in negotiating an increase in the BBC licence fee, pushing hard to win a rise of 2.3% above the rate of inflation.

While he has found a sympathetic ear in Culture Secretary Tessa Jowell, he was facing stiff opposition from Prime Minister Tony Blair and Chancellor of the Exchequer Gordon Brown.

Ms Jowell said there was "no reason" why Mr Grade's departure should delay a final licence fee settlement.

The BBC said that along with director general Mark Thompson, Mr Grade had achieved a successful charter settlement, while the future system of governance he helped secure would strengthen the BBC's accountability.

"The Board is disappointed he is moving to ITV but he leaves behind a BBC that is passionate about and committed to serving the public in new and exciting ways," said Mr Salz.