For Lord Hollick, Labour peer, financier and aspiring media mogul, the dream is over. He was putting the most positive spin possible on it all yesterday, but the disappointment was tangible.

For Lord Hollick, Labour peer, financier and aspiring media mogul, the dream is over. He was putting the most positive spin possible on it all yesterday, but the disappointment was tangible.

By selling his three ITV franchises to Granada for £1.75bn, he's been forced out of the battle to become a leading force in British and European television - indeed, forced out of all television.

In the City, he could yet win plaudits for the mature and grown-up way he has behaved in the two weeks since the Competition Commission put paid to the planned merger between his United News & Media and Michael Green's Carlton Communications.

Rather than throw his toys out of the pram, and go it alone, he has pursued the one option the commission allowed him and, in the interests of shareholder value, he has sold to Granada, giving his investors an ongoing stake in a consolidated ITV.

But in so doing, he has stripped his company down to a much smaller media player whose collection of assets - Express Newspapers, business exhibitions and information - struggle to find a cohesive theme.

By making United News & Media much smaller, the sale also threatens the company's position in the élite FTSE 100 index of leading British companies, one of the reasons the share price plunged more than 12 per cent yesterday.

Still, in every cloud there's a silver lining, and by agreeing to give Granada Media what it wanted, Lord Hollick has forestalled the possibility of a hostile bid for the whole of United News, and secured himself a kind of power base from which to rebuild.

In the unsentimental world of the stock market, that was the other reason his share price fell so heavily yesterday. The City would have preferred a break-up bid from Granada to another Hollick attempt at empire-building.

The clear winner is Granada Media, whose chairman, Charles Allen, can scarcely conceal his glee. Nine months ago, when Carlton and United triumphantly announced their agreed merger, the chances of such an outcome seemed remote. As part of the much larger Granada hotels and catering group, Granada Media lacked the focus or highly rated share price to intervene, and the regulatory roadblocks seemed too varied and many to dodge.

But since, Granada Media has been floated off as a separate company, while the Competition Commission seemed to swallow Mr Allen's case for blocking the United link-up with Granada and allowing his own ambitions, hook, line and sinker. For Mr Allen this is the start of a longer game plan that will eventually see Granada merging with Carlton and taking the European market by storm.

He was talking yesterday about sitting down with Mr Green to discuss how to run ITV as if it were one company. Regulators may have some difficulty with that, for if ITV begins to function as a single entity it might breach the spirit of the Competition Commission's findings.

Obviously, the two would continue to operate their advertising sales houses separately, but in any duopoly, especially one in which the two companies are linked on other operational matters, the degree of price competition is bound to be limited.

Interestingly, the speed with which Granada and Carlton are allowed to move towards the desired end game of just one structure of ownership for ITV depends largely on the rate of decline in their share of viewers and advertising. The Competition Commission was insistent that from a production and advertising perspective, it was important to maintain two evenly balanced ITV companies as long as audience and advertising share remained so high.

Crucially, the commission found that bringing the whole ITV network under a single owner, which would have more than 60 per cent of national TV advertising, would be unacceptable.

With the growth of pay-TV and the internet, advertising share is on the decline, but the commission took the view that even as far ahead as 2005 it would still be more than 50 per cent - too much for a single company. Some City analysts believe the decline will be much faster, but even so, the single-company end-game may yet be some distance off.