Revenue ‘disaster’ avoided by ITV Sales

ITV is believed to have escaped from the £120m advertising revenue black hole that could have spelled “disaster” for the broadcaster.

That is the figure the broadcaster could have eventually lost under the terms of the contract rights renewal agreement put in place to protect agencies from exploitation after the merger of Carlton and Granada.

Under the terms of the CRR, media agencies can take ad spend for 2005 to other broadcasters based on ITV1’s performance in the ratings in 2004 – which saw figures fall, compared to the year before – while keeping their existing share deals with the channel alive. It appears, how ever, the reality has been nowhere near as bad as it could have been for the broadcasting giant.

Although some deals are still to be tied up between agencies and ITV, the majority of business in the traditionally fierce end-of-year negotiations between TV broadcasters and advertising Broadcaster overcomes CRR fears as it completes key deals Revenue ‘disaster’ avoided by ITV Sales Calm down, dear –it’s only an account win networks has been done.

Most industry insiders predicted this week that ITV1 would now lose a maximum of around £70m once the dust has settled and could even lose as little as £50m.

“Most people are saying that ITV has lost something like half the figure that it could have lost under CRR,” said one agency source. “They were staring down the barrel of a £120m loss. That would have been a disaster.”

ITV declined to comment.

One TV boss said: “ITV has been doing everything it can to hold on to its share and it has played every card available, and played them well.”

Although still a serious dent in its finances, the result would still be a huge relief for ITV Sales managing director Graham Duff and his team, led by sales director Gary Digby.

As well as their bonuses reportedly relying on clawing back a significant proportion of the possible CRR loss, even the future of ITV chief executive Charles Allen could have come under renewed speculation had ITV been hit with the full potential exodus of revenue.

Along with a stronger line-up on its flagship channel for 2005, including the likes of Dead Man Weds , Mike Bassett England Manager and Monkey Trousers, ITV has also aggressively pushed its new digital family of ITV2 and ITV3, and has managed to see some of the money coming out of ITV1 end up on those instead.

It is believed that the lion’s share of the £50m-£70m coming out of ITV has ended up in the coffers of Channel 4, which had a strong 2004. Sky is also thought to have benefited after a highly aggressive trading season.

By Ian Quinn

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