Michael Grade has a lot for which to thank Jade Goody. Back in January, the famous-for-being-fatuous reality television contestant achieved the remarkable feat of dragging the good name of Celebrity Big Brother through the mud. Now, after Brian Belo emerged victorious from the Big Brother house to a resounding “who?”, it seems clear that Ms Goody’s outbursts marked the beginning of the end of a once-dominant franchise.

ITV executives used to tell you the summer would be a wash-out for ITV1 as long as Channel 4 had Big Brother. But even the tabloids have bored of the format, and Channel 4 has admitted it will be “resting” its celebrity spin-off next year.

Just 5.3m viewers bothered to watch Mr Belo’s triumph, compared with previous peaks of more than 9m. ITV rubbed it in with an 9.7m-strong audience for X-Factor on Saturday night. Coming after the equally powerful debut series of Britain’s Got Talent and helped by one-off successes such as the TV premiere of The Queen, which drew 7.9m viewers, ITV now looks like the one to beat in the summer.

Channel 4 is promising to respond by spending more on original drama and other UK programming. But a new hit seems some way off and ITV’s production arm could well pick up some of the new commissions.

As Mr Grade prepares for a much-anticipated strategy update next week, he will not need reminding that there is more to turning ITV around than successful programming and a bit of luck. But the luck is running his way. Advertisers are queueing up to back this autumn’s Rugby World Cup, to be shown on ITV1. If England do well, Mr Grade could be forgiven for switching his allegiances from his beloved Charlton Athletic.

Making money

Financial markets may be afflicted with self-doubt, but optimism is the order of the day among Britain’s manufacturers. Output and order books are at their highest since 1995, according to the EEF. They are pushing ahead with investment plans and having no difficulty in borrowing the funds.

Yesterday’s interim results from IMI show why manufacturers are holding their own. Like many UK engineers, it focuses on market-leading niche products, such as tough valves for oil refineries. The number it employs in the UK has bottomed out as low-value jobs have moved abroad – but the company is bullish about the outlook.

Manufacturing employment has continued to decline, but that reflects productivity growth above that of the economy. The weak went to the wall in the last two decades of the 20th century, while the survivors found profitable niches that are hard to copy in lower-wage countries.

If investors have been slow to spot the trend, acquisitive companies have not. GE, the US conglomerate, slapped down £289m yesterday to buy Sondex, the UK oilfield equipment manufacturer that floated in 2003 valued at just £38.8m. Its unsolicited 460p a share bid represents a 35 per cent premium. Expect some rerating of the sector when the reality sinks in.

Football frenzy

The madness that is the summer football transfer window is over and this summer’s was particularly frenetic. Europe’s top five leagues have spent £1bn in three months. Half of that sum, two-thirds more than last year, involves more than 100 transfers in the English Premier League. None came anywhere near the eye-popping £80m spent by Real Madrid, but 12 English clubs each paid out in excess of £20m.

Is this sustainable? Probably. First, this is in part an artificial market, with unnecessary deadlines forcing up prices and panicking owners into deals they would otherwise ignore. Second, these flows of money move mostly around clubs in the same leagues. Only a net £80m has in effect left the Premier League for other leagues. Third, the summer season represents the bulk of the year’s transfers, which means there is plenty left over for the remaining two years of the Premier League’s new TV rights deal. Finally, what are new owners for, if not to show off the depths of their pockets to suspicious fans?

But this transfer season nails the pretence that football is a rational business. Deep pockets of the ego-owners have encouraged wage inflation for around a sixth of all players in the Premiership as a direct result of transfers, making life tougher for smaller clubs with sensible five-year business plans. Unlike in other industries, they cannot be taken over by bigger rivals, nor can they immunise themselves from those rivals’ largesses. English football had begun to show signs of returning to profitability, until a rash of billionaires descended on the Premier League. If that might have been expected, so might be the decline of clubs trying to keep pace with this crazy market.


Engineers: john.willman@ft.com

Football: roger.blitz@ft.com

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