ITV chief faces unwelcome distraction with Phillip Schofield scandal

After half a decade at the helm of ITV, chief executive Carolyn McCall’s tenure could yet be defined by a grilling by MPs in an anonymous committee room in Westminster.

A week after Phillip Schofield, one of the broadcaster’s biggest stars, resigned from the network — admitting he had “lied” to ITV bosses, his agents and the media about what he described as an “unwise, but not illegal” affair with a younger male colleague — the scandal is raising uncomfortable questions for management about practices surrounding safeguarding and complaints.

In a letter on Wednesday, McCall sought to reassure the culture select committee head, media regulator Ofcom and the culture secretary that ITV was taking the matter “extremely seriously”, announcing that the network had launched an external review led by a top barrister.

The crisis is an unwelcome distraction in McCall’s efforts to turn round the struggling broadcaster, which has become a symbol of the decline of linear TV. Although the group’s share price is only down about 2 per cent over the past five days, it has dropped nearly 60 per cent during her tenure and last year the broadcaster was ejected from the FTSE 100 index.

A raft of current and former stars and executives, including McCall herself, as well as Schofield, the young producer who has since left ITV and other staff from the show This Morning will be quizzed as part of the review conducted by Jane Mulcahy KC.

Although McCall argued in the letter that ITV had taken “reasonable and proportionate” actions to investigate the affair when online rumours first began circulating in 2019, culture select committee chair Caroline Dinenage said the episode raised “fundamental issues” about safeguarding and complaint handling at the network and across the media.

Dinenage told the Financial Times that McCall’s letter showed ITV was “finally beginning to take this very seriously” but added that it “almost posed more questions than it answers”, including failing to outline the “terms of reference” and timeline of the review.

In an interview with the BBC on Friday, Schofield, who announced in 2020 that he is gay and had separated from his wife, denied he took out a super-injunction to suppress media coverage or that the younger colleague was forced to sign a non-disclosure agreement. He also denied using cars paid for by ITV to ferry the man to his London apartment.

Despite the scandal having been splashed across the front pages of the UK press most days this week, investors appear sanguine.

“I don’t think shareholders are worrying about the Schofield news,” said a top-15 investor. “There are far more important things driving the share price.”

In an attempt to wean ITV off the declining broadcasting model, McCall has managed to increase annual revenues from production arm ITV Studios from about £1.6bn to £2.1bn during her tenure, making the unit account for almost half of group revenues. But much of her reputation will be staked on the success of the broadcaster’s revamped streaming service ITVX, which launched in December at an initial cost of £225mn.

“There’s a lot of noise about this situation but unless there is proof of management wrongdoing . . . then the current situation is unlikely to have any impact on shareholder support for the board and the CEO,” the top-15 shareholder said.

A top-10 investor said the Schofield debacle was among the issues “that come and go, where channels lose their anchor person”.

But former and current ITV executives and talent said the Schofield case could at least distract from, or at worst derail, McCall’s attempts to turn round the broadcaster in the streaming era.

“Ultimately Schofield’s affair is not very important . . . if you screwed up the handling of it, you’d be in trouble, but Carolyn hasn’t screwed it up,” said one senior industry figure. Even if the external review criticises management, “they’ll have to take it on the chin but you don’t resign about that”, he added. “You just say: ‘We’ll tighten it up’.”

However some former high-ranking ITV staff are less positive. “I think she’s toast,” said one. “She’s run out of ideas . . . I don’t think anyone looks at ITV and thinks they really know what they’re doing and that’s on her. If you’re looking for an excuse as investors to force change, this seems to be the obvious moment.”

People close to the broadcaster insisted McCall’s job does not involve managing high-profile talent. That responsibility instead falls under the remit of Kevin Lygo, the head of ITV’s media and entertainment division, and Emma Gormley, who oversees the broadcaster’s daytime TV output, they added.

McCall’s tenure has been marred by several high-profile controversies surrounding on-air talent. She had to answer questions from MPs following the death by suicide of Love Island host Caroline Flack and three former contestants. She also had to handle Good Morning Britain presenter Piers Morgan’s tempestuous departure from the show and she cancelled the Jeremy Kyle Show after a decade on the air after a guest died by suicide.

“There are a lot of big egos with an axe to grind with Carolyn,” said the senior industry figure.

Morgan took to Twitter earlier this week to question the “veracity of ITV management denials” in light of the circumstances around his departure, and former This Morning presenter Eamonn Holmes said in a TV interview that “those in authority [at ITV] had to know” about the Schofield affair.

McCall defended ITV’s procedures to safeguard staff, handle complaints and enable anonymous whistleblowing in her letter on Wednesday, saying these were “robust and well established”.

Conor O’Shea, media analyst at Kepler Cheuvreux, said McCall would be “front and centre” in dealing with the scandal to “avoid any toxicity spreading to advertisers about the whole thing”.

But he added that advertising outside the primetime hours between 7pm and 11pm likely accounted for at most a third of ITV’s £1.5bn in yearly revenues from TV-related advertising. The contract of This Morning’s main sponsor Arnold Clark, a car retailer, will lapse as planned later this year.

This Morning pulled in an audience of only about 650,000 viewers a day in the latest week of data compiled by the Broadcasters’ Audience Research Board.

“There’s a lot more to ITV than This Morning but the critical thing is, will the boat stabilise and will the audiences stick,” said media analyst Alice Enders. “Whatever happens, there is a demand for that sort of format — whether it’s called This Morning or replaced with something else.”