UK’s ITV to slash jobs, programming
05 Mar 2009
The UK government has been urged to intervene to stop further "damage" to ITV programmes after the broadcaster major cost-cutting measures that included 600 job cuts and slashing the programming.
The company blamed the "short-term horrors" of the economic downturn, including a slump in advertising, for the cuts which will take a toll of 15 per cent of its workforce and the closure of a studio in Leeds.
ITV will also sell its Friends Reunited social networking website little more than three years after it bought the business for an initial £120 million from founders Steve and Julie Pankhurst.
The redundancies come less than six months after the last round of job cuts, when 1000 employees were axed. Michael Grade, the ITV executive chairman, said the advertising market was "the most challenging I have experienced in over 30 years in UK broadcasting" and effectively signalled the end of a content-led recovery strategy, based on boosting online revenues and overseas programme sales.
The company also cancelled the payment of a final dividend to shareholders. Grade said, "This is not a decision taken lightly. The board's judgment is that it represents the prudent course in present conditions."
Writing in The Guardian on Wednesday, Grade pointed to the impact of the economic downturn: "Unlike other businesses, ITV's ability to respond to these challenges is hampered by an outdated regulatory regime - established when ITV had a virtual monopoly of TV advertising."
Drama output on ITV will be cut from eight hours a week to seven, with ITV already set to scale back production of Heartbeat and The Royal.
Gerry Morrissey, general secretary of the broadcasting workers' union Bectu, said he was outraged at the scale of the job cuts. "We will do everything we can to protect our members and we will protest to Ofcom about ITV's claim to be investing more in programmes when they are cutting back. Michael Grade has abrogated his responsibility to ITV's staff," he said.
ITV reported pre-tax losses of £2.73 billion after it wrote down the value of assets on its balance sheet. Stripping out the exceptional items, profits were down 41% at £167 million. Its pension deficit was estimated at £178 million last year, up from £112 million in 2007.
The outlook for 2009 provides little respite, with total UK TV advertising forecast to be down 17 per cent year on year in the first quarter and 20 per cent in April, although ITV said it expects to outperform the market overall.
ITV has also abandoned ambitious revenue growth targets for its online and TV production businesses and taken the knife to its £1.125 billion annual programming and content budget. Content investment will be cut by £65 million this year, held flat in 2010 due to costs associated with ITV's coverage of the football World Cup in South Africa, but cut by a further £70m in 2011.
