Britain’s Thames Television Faces an Uncertain Future : Broadcasting: The London-based franchise has lost its license in an auction; some say it’s the result of former Prime Minister Thatcher’s anger over a documentary critical of her administration.

Astute television viewers may be familiar with the logo of Thames Television, a sketch of London riverfront landmarks encompassing St. Paul’s Cathedral, Tower Bridge and Parliament. A larger number of viewers have watched Thames programming without realizing it.

From the documentary series “The World at War” to the regal story of “Edward and Mrs. Simpson” to the wigged judicial proceedings of “Rumpole of the Bailey,” the London-based Thames has made a small, but significant, imprint on American television. “Reilly Ace of Spies,” “The Naked Civil Servant,” “Rock Follies”--even its bawdy comedy “The Benny Hill Show” left its mark.

But despite its reputation for high-quality television and its status as Great Britain’s largest independent TV producer-broadcaster, Thames’ future is in doubt. Its logo is in danger of becoming like an extinct animal, seen only in old pictures.

Thames, which has been broadcasting to the greater London region for more than 25 years, lost its license in an October TV franchise auction that brought widespread criticism and condemnation. Outbid by Carlton Communications, Thames will cease broadcasting at the end of 1992.

Under previous British regulations, broadcasters vying for one of the 15 Independent Television (ITV) regional franchises, or the national breakfast television slot, were selected by the quasi-governmental Independent Broadcasting Authority (IBA) on purely subjective grounds. The broadcasting authority, which has since become the Independent Television Commission (ITC), had almost unlimited discretion in awarding the coveted franchises.

But in 1990, the British government enacted a new broadcasting bill that, among many changes, turned the awarding of ITV broadcasting franchises into an auction. The company that promised to pay the government the greatest amount of money during the 10-year licensing span would be the winner. Following a public outcry over fears that the process would result in cheap, lowbrow programming, a provision was added that bidders also would have to meet a “quality threshold.”

The auction stripped four regional broadcasters of their licenses in the biggest shake-up in U.K. commercial television since its inception 36 years ago. While two companies, including Thames, lost for bidding too low, the other two were dropped for bidding too high--ITC members decided those companies could not pay such huge amounts and remain viable. One of the high-bidding losers has begun legal action, and other companies upset at the way the selection was handled are threatening to follow suit. The uproar has virtually assured that the same process will not be be repeated.

But it appears too late for Thames, which bid about $57 million a year, a sum that company executives insist was the highest amount they could pay and remain profitable. Carlton won with a bid of about $76 million.

At Thames, there is widespread belief, from the chief executive on down to production crew members, that the creation of the bidding system was at least partially the result of former Prime Minister Margaret Thatcher’s anger at a 1988 Thames documentary that questioned Britain’s anti-terrorist activities.

After three suspected IRA terrorists were gunned down by British agents in Gibraltar, the Thames current-affairs program “This Week” sent a team to investigate. The result was an documentary called “Death on the Rock,” which found evidence that the IRA suspects were unarmed, had been gunned down at point-blank range and that two of them may have been trying to give themselves up. The documentary’s findings ran counter to much of what the British government had said occurred in the incident.

Before the program aired--Thames produces the show for the entire national ITV network--Thatcher attempted to have it shelved. “There was distinct pressure from the government not to show the program,” says ITC (formerly IBA) spokeswoman Lesley Aston. “The (government’s) conclusion was that the people who made the program must have been sympathetic to the IRA, which was not true.”

IBA officials reviewed the program, decided it was balanced and aired it. Afterward, an inquiry led by a former Conservative Member of Parliament from Northern Ireland was set up to investigate allegations that the documentary was biased. The subsequent report vindicated Thames.

But there are now those who believe that Thatcher, boiling over from the documentary fiasco, decided to dilute the IBA’s power and restrict its ability to award broadcast licenses.

The IBA’s Aston disagrees with this theory, saying plans for a franchise-auction already were in place before the documentary, although she says “the IBA did incur the wrath of the Conservative government.”

However, at a conference of the Royal Television Society in September, Thames chief executive Richard Dunn said that “ ‘Death on the Rock’ increased even further (Thatcher’s) irritation with the regulatory authority and convinced her that its judgment in the competitive tender was not to be trusted.”

Just after the franchise awards were announced, a Thames worker who chaired a shop stewards committee told reporters: “The loss of the license is entirely due to a piece of vindictive government legislation brought in by the current government after the excellent Thames program ‘Death on the Rock.’ ”

Thames executives are now determined to keep the company afloat by transforming it into an independent production company. As part of that transition, executives already have announced plans to lay off at least 1,000 employees out of the 1,400 total.

Nonetheless, it remains unclear whether the company--even radically pared down--can survive. Rival broadcasters, such as the BBC and the BSkyB satellite network, have made inquiries about buying several of Thames’ most successful series.

But beyond keeping its hit shows in production, there is a question of how much programming Thames can sell in a domestic market that has been traditionally difficult for independents. The company also will have to place more emphasis on international sales.

Even if Thames continues exporting programs to the United States, however, they may be unlike the meticulously produced, big-budget fare that has come before. Without the advertising income and guaranteed program sales that a regional broadcast franchise brings, says a Thames spokesman, the company will probably stop producing the “high-quality, low-ratings favorites” it is known for, concentrating on more popular and profitable series.