In January 1978, Eric Morecambe and Ernie Wise, just over four weeks after the broadcast of their successful 1977 Christmas Show on BBC1, which attracted an audience of just over 28m, announced that they had signed a contract with Thames Television to produce new shows for broadcast on ITV. This marked a return to commercial television for the pair, who between 1961 and 1968 had produced six series for ATV. While their time at the BBC had been both a critical and ratings success, Morecambe and Wise retained an ambition to make films. This was something that the BBC were not in a position to enable them to do, as, at the time, the Corporation did not have a motion picture production arm. Although evenly matched in the financial terms that were offered, it was the fact that Thames Television, through its film production company, Euston Films, were able to offer Morecambe and Wise the opportunity to make a film, that persuaded them to leave the BBC.
During 1953, the studios were bought by Douglas Fairbanks, Jr., mainly for television production and were later sold to Lew Grade's Associated Television (ATV). The Eldon Avenue centre became the main television production hub for ATV. The smaller Studios A and B were used for schools and sitcoms, while Studio C was a drama studio. Studio D, with permanent audience seating, was used for light entertainment programmes such as the ATV Morecambe and Wise series (Two of a Kind, 1961–68) and The Muppet Show (1976–81).