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Troubled ITV cuts jobs and costs Troubled ITV cuts jobs and costs
(30 minutes later)
ITV has announced it is cutting 600 jobs across its business, and plans to make other "significant" savings. ITV has announced it is cutting 600 jobs across its businesses, and plans to make other "significant" savings.
The announcement came as ITV reported a loss of £2.7bn for 2008 after a huge write-down in the value of its assets.The announcement came as ITV reported a loss of £2.7bn for 2008 after a huge write-down in the value of its assets.
About 500 of the jobs will be lost in Leeds with the closure of its Kirkstall Road studios, which makes programmes such as Heartbeat and The Royal.About 500 of the jobs will be lost in Leeds with the closure of its Kirkstall Road studios, which makes programmes such as Heartbeat and The Royal.
ITV, which has been hit by a sharp drop in advertising revenue, also plans to sell the website Friends Reunited.ITV, which has been hit by a sharp drop in advertising revenue, also plans to sell the website Friends Reunited.
Excluding the write-down in the value of its broadcasting and online assets, Britain's biggest commercial broadcaster reported a profit of £167m, down 41% on 2007.Excluding the write-down in the value of its broadcasting and online assets, Britain's biggest commercial broadcaster reported a profit of £167m, down 41% on 2007.
Chairman Michael Grade said: "Current conditions in the advertising market are the most challenging I have experienced in over 30 years in UK broadcasting."Chairman Michael Grade said: "Current conditions in the advertising market are the most challenging I have experienced in over 30 years in UK broadcasting."
FROM THE TODAY PROGRAMME More from Today programmeFROM THE TODAY PROGRAMME More from Today programme
ITV's advertising revenue has fallen with the growth of niche commercial channels and the internet.ITV's advertising revenue has fallen with the growth of niche commercial channels and the internet.
The company estimates its net advertising revenue for the first quarter of 2009 will be down by about 17% on the same period last year.The company estimates its net advertising revenue for the first quarter of 2009 will be down by about 17% on the same period last year.
Union angerUnion anger
ITV's cost-cutting measures include:
  • 600 jobs to go across its businesses
  • Annual savings of £155m in 2009, rising to £245m in 2011
  • Plans to sell Friends Reunited. ITV bought the social networking site for £120m in December 2005. It is now valued at about £40m
  • Plans to sell its online business directory Scoot
  • Closure of ITV Local broadband service, which provides local news content, as a standalone business
  • Considering options for its SDN business, which leases space on Freeview.
Gerry Morrissey, general secretary of broadcasting union Bectu, rebutted ITV's claims that the cutbacks were as a result of the economic downturn.Gerry Morrissey, general secretary of broadcasting union Bectu, rebutted ITV's claims that the cutbacks were as a result of the economic downturn.
"This is because of the mismanagement of ITV and has been going on for longer than the current credit crunch," he said."This is because of the mismanagement of ITV and has been going on for longer than the current credit crunch," he said.
He claimed that the group's management had been more interested in looking after shareholders and senior management, rather than staff and viewers.He claimed that the group's management had been more interested in looking after shareholders and senior management, rather than staff and viewers.
He also accused ITV of giving up on its public service broadcasting remit after the broadcaster said it was going to move more towards popular entertainment programmes.He also accused ITV of giving up on its public service broadcasting remit after the broadcaster said it was going to move more towards popular entertainment programmes.
Uncertain tradingUncertain trading
The broadcaster admitted that its targets set in 2007 were "no longer appropriate". The targets set had assumed growth in UK television advertising, but there had since been an "unprecedented deterioration in the global economic outlook", the broadcaster said.The broadcaster admitted that its targets set in 2007 were "no longer appropriate". The targets set had assumed growth in UK television advertising, but there had since been an "unprecedented deterioration in the global economic outlook", the broadcaster said.
It now plans to deliver annual savings of £155m in 2009, rising to £245m in 2011.It now plans to deliver annual savings of £155m in 2009, rising to £245m in 2011.
That includes a reduction in network programme investment. ITV said it would reduce its spending on programme-making by £65m in 2009, and by a further £70m in 2011.That includes a reduction in network programme investment. ITV said it would reduce its spending on programme-making by £65m in 2009, and by a further £70m in 2011.
However, Mr Grade insisted that ITV's targeted audience share would remain unchanged.However, Mr Grade insisted that ITV's targeted audience share would remain unchanged.
In 2008, ITV1 achieved an audience share of 17.2%, down from 17.9% in 2007. ITV's digital channels accounted for 4.8% of total viewing share last year.
ITV said it was difficult to predict its future revenues and warned that trading in 2009 remained uncertain.ITV said it was difficult to predict its future revenues and warned that trading in 2009 remained uncertain.
The broadcaster said it would not pay a dividend in 2009.The broadcaster said it would not pay a dividend in 2009.
It also announced plans to sell its online business directory Scoot and the closure of its ITV Local broadband service, which provides local news content.
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  • ITV was launched in 1955 following the Television Act of 1954, which for the first time made the launch of a commercial television channel possible. It was made up of 15 broadcasting regions, each run by a separate company.
  • The Broadcasting Act of 1990 allowed regional companies, under specific conditions, to merge for the first time. It paved the way for the consolidation of ITV - the first merger taking place in 1994, with Granada buying LWT.
  • Six years later, Granada owned six regional licences, Carlton owned five, and in February 2004 ITV plc, created when those two companies merged, was born.
  • ITV2 was launched in 1998, ITV3 in 2004 and ITV4 in 2005. CITV and ITV2 +1 launched in 2006.
Have you been affected by the issues covered in this story? Do you work for ITV? Send us your comments using the form below.Have you been affected by the issues covered in this story? Do you work for ITV? Send us your comments using the form below.
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