ITV’s Grade slams Ofcom

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ITV boss Michael Grade used the broadcaster’s half-year results announcement (to June 30) and a 28% rise in losses, to criticise Ofcom and the clutch of other British broadcasting regulators on their outdated rules.

Officially, the ITV statement was polite, saying: “We continue to work with regulators, making the case for an urgent reduction in ITV’s regulatory burden.” Much worse was to follow.

Speaking on the BBC, Michael Grade argued that ITV was hamstrung by “nanny state” regulation. “Ofcom and the government needs to understand very very quickly that we cannot afford to pay more than the licence is worth. We are currently paying about £220m a year. If we cannot get a quick resolution to this, as Ofcom itself has outlined, then we at ITV have an option to give up our Public Service obligations. We don’t want to do this. Our PSB obligations are more than met by the more than £1bn we invest each year [in programming].”

Grade insisted that ITV was not threatening Ofcom: “It is a realistic scenario. We want to be left to get on and compete in the market. [We’d like to lose] a whole host of nanny state regulation about where we put our advertising minutes, how we have to treat our suppliers [because] ours are protected by statute and regulation [with] contracts we enter into with independent producers are controlled by a regulator. This is all Alice in Wonderland, this all belonged 20 years ago. It is so out of date.”

ITV is, Grade claimed, in better shape operationally than it has been for a number of years. He is targeting further cost savings of around £35m by 2010 because of the advertising downturn, with an inevitable impact on jobs. Discussions with staff and unions are now taking place.

Operating EBITDA was down £30m (to £121m), but pre-tax profits were a frightening negative £1.53bn compared with a positive profit of £105m for the same period last year. However, a non-cash amount of £1.6bn was a one-off impairment charge forced on ITV by UK accounting regulations and applicable to “Broadcasting Goodwill” and down to the reduced ad-market forecasts for 2008-2009.

“ITV estimates that ITV NAR for September will be down 20% with the total market down 17%. Whilst ITV has limited visibility on advertising revenues beyond September, ITV expects to outperform the total market over the full year,” said an ITV statement. ITV’s shares fell 10% in the first hour of trading.


Source:RapidTVNews