Page 138 - Culture Society and the Media

128 CONTROL OF THE COMMUNICATIONS INDUSTRIES
instance. Take for example the case of London Weekend Television. When the
British commercial television franchises came up for reallocation in 1967, the
company successfully bid for the contract to serve the London area at weekends.
Their submission promised innovations in all major areas of programming and
pledged that the company would ‘respect the creative talents of those who,
within the sound and decent commercial disciplines, will conceive and make the
programmes’. On this basis they attracted an experienced and highly-regarded
management team headed by Michael Peacock, a former Controller of BBC 1.
As economic conditions in the television industry worsened, however, the
‘commercial disciplines’ increasingly prevailed over ‘respect for creative
talents’. Programme innovations were shelved and relatively unprofitable drama
and arts programmes had their budgets cut and were broadcast at non-peak
times. By the spring of 1969, peak-time viewing was almost completely
dominated by American material, cinema films, comedy shows and successful
series from other companies. Despite this concentration on relatively low-cost,
high-audience programmes, however, LWT made a loss of 1.1 million pounds in
its first year of operation. Then, in September 1969, under pressure from the
leading interests on the board, Michael Peacock’s contract was terminated. This
action precipitated a crisis among the creative management and six of those in
senior positions resigned. As one of them, Frank Muir (the head of
Entertainment) explained to the press afterwards:

We thought we had the programme creative element built into their
business board with Michael Peacock on it. But, it wasn’t enough. What it
boils down to is the divine right of boards to have the final say in TV-
programme companies.

Theorists of capitalism see this and similar instances as confirming Marx’s
general argument that the interests of owners operating through key members of
the board, continue to determine the basic allocative policies of modern
corporations. Supporters of the ‘managerial revolution thesis’ on the other hand,
strongly oppose this conclusion and insist that the dispersal of shareholding and
separation of ownership from management have brought about a fundamental
shift in the locus of corporate control. As modern corporations expand and
become more complex, they argue, only the full-time executives are in a position
to keep track of developments and since they control the flow of information to
the board, they can present the available options in ways that favour the policies
they would like to see implemented. Moreover, with the progressive expansion
of legal ownership through new share issues, the larger holders command a
steadily diminishing proportion of the total and are less and less able to enforce
their interests. Consequently, although the directors still formally control the
corporation on behalf of the shareholders, in reality they are reduced to rubber-
stamping the strategies and policies devised by the managers. They have
replaced owners as the primary allocative controllers.